Philip Morris International Inc

Strong Q2 + H1 performance (beat expectations) - Q2: +8% organic net revenue and +11% organic operating income; adjusted diluted EPS +15% (to $2.20). - Q2 net revenues: crossed $11B for the first time; adjusted operating income $4.8B. - H1: +5.3% organic net revenue and +6.1% organic adjusted operating income; adjusted diluted EPS $4.16 (+9.4% organic, +15.6% USD). - Notable “surprise/positive” EPS driver: part of the EPS outperformance came from an unrealized transactional FX effect tied to deferred tax liability (Russian ruble); plus some SG&A phasing (Q2 -> Q3) and strong combustible performance.

Smoke-Free momentum remains the engine (and is expanding profitability) - International dominates: 93% of H1 group net revenues. - Smoke-Free in H1: +13.7% organic net revenue and +16.9% gross profit; gross margin +190 bps to 70%. - Q2 Smoke-Free: +6.4% net revenue, +8% gross profit (pricing + volume + favorable mix). - IQOS: adjusted in-market sales volume +5.1% in Q2 and +5.4% in H1 (despite Japan/Pose-up headwinds); global share in heat-not-burn ~76% in H1. - E-vapor (VEEV): very strong—+55% shipments in Q2 and +72% in H1; described as the #1 brand in Europe (closed pod and combined) and #1 in global travel retail where present.

Combustibles were better than expected, but mix/volume is a key watch item (negative) - Q2 combustible performance: pricing + strong momentum; pricing variance expected to be >7% full-year (vs prior assumptions), but annualization + unfavorable geographic mix expected in H2. - Cigarettes volume expectation moderated: due to Q2 strength and latest industry dynamics, PMI now expects cigarette volume decline ~2%–3% (previously ~3%). - H1 cigarette volumes: -1.9% overall; Q2 cigarette shipments +1.1% ahead of expectation due to timing/comparisons and certain market dynamics. - Bad/structural challenge: industry volume decline in more developed markets and mix effects continue to pressure net revenue growth even when pricing is strong.