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2023 Investor Day
Emmanuel Babeau shares his highlights from our Q4 & Full-Year Results
Emmanuel Babeau, Group Chief Financial Officer for Philip Morris International, speaks to camera:
Our Fourth‑Quarter and Full‑Year results are out.
’25 was another outstanding year for PMI.
The shift of adult smokers to better alternatives is a lasting structural movement, one that we continue to lead and from which we are generating strong, sustained growth.
We delivered our fifth consecutive year of positive volumes with rapid top‑line progress and significant margin expansion, generating strong value for our shareholders, including the largest dividend increase in over a decade.
The numbers show our progress.
Our total net revenue reached over $40 billion in 2025, with 41.5%, or close to $17 billion, generated by our smoke‑free business.
27 markets exceeded the 50% net revenue milestone in ’25, and in Q4 2025, the Europe region also surpassed 50%, making three of our four regional segments majority smoke‑free.
Even more impressive is the smoke‑free adjusted gross profit contribution, which has essentially doubled in five years to 43% of total PMI.
Our adjusted operating margin also returned to above 40% in 2025, as our transformation becomes increasingly profitable.
This enabled us to deliver +15% adjusted diluted earnings per share growth in dollar terms, which is the strongest growth since 2011, excluding the pandemic‑recovery year of 2021.
We continue to scale our global smoke‑free presence, reaching 106 markets at the end of 2025, with our performance fueled by the international business, which generated the vast majority of total PMI organic net revenue growth,led by smoke‑free products, with IQOS the core driver.
This includes an impressive acceleration in the fourth quarter, with a return to strong double‑digit growth in Italy and a very promising start in Taiwan, being just two examples of broad growth across geographies.
This performance also reflects the success of our multicategory strategy, with both ZYN, excluding Nordics, and VEEV more than doubling shipment volumes in international markets.
In the U.S., ZYN shipments grew strongly by +37%.
Our strong brand offering, which includes high‑quality science‑backed products in all three smoke‑free product categories, allows us to better serve legal‑age consumers and enhance our financial performance.
Combustibles delivered robust top‑ and bottom‑line performance.
We accomplished this through strong pricing, portfolio resilience, and disciplined execution.
Managing this business responsibly enables us to invest boldly in better alternatives and sustain our smoke‑free momentum.
While we are proud of what we have accomplished so far, our focus remains on the future.
We have an exciting pipeline of initiatives and innovations over the next three years, supported by increasing digitalization and our new organizational model.
With this strong foundation, we look forward with confidence to 2026 and beyond.
Music starts.
Philip Morris International's logo is seen on screen alongside the words Global Smoke-free Champion.
Financial disclaimer appears on screen.
Music ends.
We are investing behind innovation and delivering sustainable growth from our leading smoke-free products, which are a much better choice than continued smoking.James Bushnell Vice President, Investor Relations & Financial Communications
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Investor relations
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Philip Morris International is leading a transformation in the tobacco industry to create a smoke-free future, and ultimately replace cigarettes with smoke-free products to the benefit of adults who would otherwise continue to smoke, as well as to society, the company, and its shareholders. PMI is building its future on a new category of smoke-free products that, while not risk-free, are a much better choice than continuing to smoke. Through multidisciplinary capabilities in product development, state-of-the-art facilities and scientific substantiation, PMI aims to ensure that its products meet adult consumer preferences and rigorous regulatory requirements.
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We are engaged in the manufacture and sale of cigarettes and smoke-free products in more than 180 markets around the world.
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We have a leading multicategory smoke-free portfolio with IQOS, ZYN and VEEV.
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Our brand portfolio is led by Marlboro, the world’s best-selling international cigarette. Based on the strength of our brand portfolio, we enjoy robust pricing power.
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One of our key strategic priorities is to develop, assess, and commercialize a portfolio of innovative tobacco and other nicotine-containing products. We draw on the expertise of a team of world-class scientists from a broad spectrum of disciplines to help us reach our ultimate goal of replacing cigarettes with less harmful alternatives.
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