Philip Morris International's net revenue increased 7.1% year-over-year in the second quarter of this year.
Philip Morris International's net revenue reached a record high of US$10.14 billion in the second quarter of this year, a year-over-year increase of 7.1%. Operating profit reached US$3.712 billion, a year-over-year increase of 7.8%. The company also achieved significant growth in stock returns. In the second quarter of this year:
- Smokeless tobacco product shipments increased 11.8% year-over-year, net revenue increased 15.2% year-over-year, and gross profit increased 23.3% year-over-year.
- Net revenue from smokeless tobacco products accounted for approximately 41% of the company's total net revenue, and gross profit accounted for approximately 42% of the company's total gross profit, representing year-over-year increases of 2.9% and 3.8%, respectively.
The company's smokeless tobacco products are now available in 97 markets worldwide, with its three flagship brands (IQOS, ZYN, and VEEV) sold in 20 of them.
As the core product of Philip Morris International's smokeless tobacco business, IQOS heated tobacco generated over $3 billion in net revenue in the second quarter of this year, solidifying its brand position and driving global heated tobacco sales growth. Philip Morris International currently holds a 76% market share in the global heated tobacco market.
- In the e-cigarette sector, VEEV e-cigarettes maintains profitable growth and currently covers 42 markets worldwide, holding the top position in six European markets, including Greece and Italy.
- In the oral product sector, Philip Morris International's shipments increased by 23.8% year-on-year in the second quarter of this year, with nicotine pouch shipments increasing by over 40% year-on-year. Currently, the company covers 44 markets worldwide.
- In the traditional combustible tobacco business, Philip Morris International's net revenue in the second quarter of this year increased by 2.1% year-on-year, and gross profit increased by 5% year-on-year.
In the second quarter of this year, Philip Morris International's overall global cigarette market share remained largely stable. Marlboro brand cigarettes continued to grow, reaching their highest quarterly market share since 2008.
Philip Morris International CEO, Alex Ozark, stated, "Our second-quarter results reflect strong momentum across our diverse business categories, with adjusted sales growth for IQOS, accelerated sales growth for ZYN, and resilience in our combustible tobacco business. Given our strong first-half performance, we have raised our full-year operating guidance."
Philip Morris International expects total cigarette and smokeless tobacco product shipments to increase by approximately 1% year-over-year in 2025, cigarette sales to decrease by approximately 2%, and smokeless tobacco product sales to increase by 12% to 14% year-over-year. Full-year net income is projected to increase by 6% to 8%, and operating income by 11% to 12.5%.
British American Tobacco's revenue fell 2.2% year-on-year in the first half of this year.
- British American Tobacco's operating revenue reached £12.07 billion (£1 equals approximately RMB 9.65), a year-on-year decrease of 2.2%;
- Revenue from innovative tobacco products was £1.651 billion, essentially flat compared to the same period last year;
- Operating profit was £5.07 billion, a year-on-year increase of 19.1%.
British American Tobacco CEO Marocco said: "Our operating performance in the first half of this year slightly exceeded expectations, and we are on track to achieve our full-year targets. We have added 1.4 million new consumers of our innovative tobacco products, bringing the total to 30.5 million. The proportion of innovative tobacco product revenue to our total revenue has increased year-on-year."
British American Tobacco performed well in the US market, achieving both revenue and profit growth for the first time since 2022. The successful launch of Velo Plus, a nicotine pouch, led to growth in both sales and market share for traditional tobacco products. The company continued to see operating growth in Africa and the Middle East. In Asia Pacific, fiscal and regulatory policies in Bangladesh and Australia had a limited impact. Among innovative tobacco products, the Velo brand showed strong momentum.
"By prioritizing investments in high-margin products, we achieved high returns. At constant exchange rates, the contribution of innovative tobacco products to the company has further increased. Our strong cash conversion performance, coupled with the recent partial divestment of our stake in ITC, has enhanced our financial flexibility. Through strengthened financial measures, we are committed to cost savings and reinvestment. I am confident that current investment activities will drive revenue back to growth by 2026," said Marrocco.
Japan Tobacco's revenue increased by 10.5% year-on-year in the first half of this year.
Japan Tobacco has performed well this year, with several indicators showing significant improvement compared to the same period last year. For the first half of this year:
- Operating revenue reached 1.73 trillion yen (1 yen = approximately RMB 0.05), a year-on-year increase of 10.5%;
- Core operating revenue, calculated at constant exchange rates, reached 1.72 trillion yen, a year-on-year increase of 14.2%;
- Operating profit reached 479.9 billion yen, a year-on-year increase of 10.9%;
- Net profit reached 319.9 billion yen, a year-on-year increase of 4.8%.
- Looking ahead to the full year, Japan Tobacco has raised its operating performance forecasts for 2025 across the board:
- Operating revenue forecast increased by 71 billion yen, a year-on-year increase of 6.2%;
- Core revenue forecast increased by 54 billion yen, a year-on-year increase of 8.4%;
- Operating profit forecast increased by 68 billion yen, a year-on-year increase of 128.5%;
- Net profit forecast increased by 44 billion yen, a year-on-year increase of 175.6%;
- Cash flow forecast increased by 6.55 billion yen year-on-year, a decrease of 112 billion yen from the original forecast.
Japan Tobacco President and CEO Masamichi Terabata said: "Japan Tobacco delivered a solid first-half performance. The stable pricing power of our tobacco business and the significant contribution of the Vector Group acquired last year contributed significantly to the company's performance, driving significant growth in operating profit."
Imperial Brands' net revenue increased 3.2% year-over-year in the first half of fiscal year 2025.
At constant exchange rates, Imperial Brands' net revenue, including both its traditional tobacco and new tobacco products businesses, increased 3.2% year-over-year in the first half of fiscal year 2025.
"We achieved broad-based operating performance growth across all our markets," said Imperial Brands CEO, Steve Bomhard. "This validates our strategy of competing as a challenger and reflects our ongoing efforts to improve our customer service capabilities, strengthen sales execution, and build a performance-based culture."
- In the traditional tobacco business, Imperial Brands' total market share in five priority markets increased by 6 percentage points year-over-year, exceeding the company's target to maintain market share. Pricing strategies in the traditional tobacco business offset the impact of declining sales.
- In the new tobacco product segment, Imperial Brands' e-cigarettes, heated tobacco, and nicotine pouches all increased market share and net revenue. This contributed to a 15.4% year-over-year increase in new tobacco product net revenue and a 14% reduction in adjusted operating loss. Imperial Brands' nicotine pouches saw growth across all markets, with Zone brand nicotine pouches in particular further increasing market share in the United States.
"Our operational initiatives have delivered strong financial performance and ample cash flow, supporting investment and shareholder returns. Imperial Brands is returning the favor to shareholders through a £1.25 billion share buyback program and an increased interim dividend," said Bomhard.
Despite the uncertain global economic environment, Imperial Brands remains on track to achieve its full-year operating performance targets, with the first-half performance growth positioning the company well for achieving its full-year targets.
"Looking ahead," said Bomhard, "we are committed to driving our 2030 strategy, further strengthening our combustible and innovative tobacco businesses, and delivering sustainable growth and long-term shareholder value over the next five years through progressive dividend increases and continued share buybacks."
Compiled by Yang Linxi, Cen Pinpin, Wang Wenjie, Wang Yifan, Zheng Jie, Pang Min, and Yang Hailong from the Philip Morris International website, the International Tobacco Journal, the Tobaccocoreporter website, and the Imperial Brands website.
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