Philip Morris International Releases Integrated Report Detailing Progress Towards Its Smoke-Free Vision

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The 2024 Integrated Report marks a decade of PMI’s smoke-free journey and showcases the company’s business transformation and key sustainability achievements, as evidenced by performance on its Sustainability Index 2022-24

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STAMFORD, CT — Philip Morris International Inc. (NYSE: PM) today published its sixth annual Integrated Report, marking the company’s 10th year of business transformation and sustainability disclosures. The document details PMI’s continued progress in delivering long-term value to shareholders and other stakeholders while advancing its purpose of having its smoke-free alternatives make cigarettes obsolete as soon as possible.

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“Our 2024 Integrated Report celebrates a milestone year that marked the 10th anniversary of the commercialization of IQOS, VEEV and ZYN and our journey toward achieving one of the most ambitious business transformations in modern history,” said Jacek Olczak, Chief Executive Officer of PMI. “By the end of 2024, our efforts to expand access to smoke-free products allowed us to reach an estimated 38.6 million adult users, with the products available in 95 markets, demonstrating our deep commitment to sustainability and business transformation. These achievements fill me with profound optimism as we continue to create long-term value while addressing our product and operational impacts, not only sustaining but accelerating our momentum, accomplishing a number of goals that only a few years ago seemed too ambitious.”

The Integrated Report describes the company’s strategy, business model, and both product-related (‘what’ the Company produces) and operational-related (‘how’ the Company operates) performance. The report explains the Company’s performance and approach to sustainability in the context of a comprehensive five-pillar framework that includes compliance and risk mitigation as well as operational efficiency, innovation, and purposeful impact. It emphasizes how regulatory compliance serves as the foundation while risk management ensures business resilience. It highlights how this approach streamlines processes for enhanced productivity and profitability, aligns sustainability with long-term business goals to drive innovation and competitive value, and ultimately aims to lead a significant industry transformation by influencing standards, shaping policy, and driving systemic change that redefines market expectations.

“The path to transformation is rarely linear, and our experience in 2024 reinforces a crucial truth: Achieving a smoke-free future requires collective effort beyond our direct control. Our smoke-free business accounted for approximately 39% of PMI’s total net revenues for the full year 2024, with an acceleration in top- and bottom-line growth. Competing in the cigarette market while simultaneously working to transform it is not a contradiction but a necessary phase in our journey,” said Emmanuel Babeau, Chief Financial Officer of PMI. “Our integrated approach—linking financial success with positive impact—positions us well to continue investing in the future. We remain confident that our financial strength, combined with our sustainability leadership, is the right path forward.”

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Product and Operational Impact: Performance Highlights

• Six markets where more than 75% of net revenues are generated from smoke-free (2023: 3)
• Over USD 14 billion cumulative investment behind smoke-free products since 2008 (2023: USD 12.5)^{1, 2}
• 99% of total shipment volume covered by youth access prevention programs in indirect retail channels (2023: 98%)³
• 0.01% prevalence of child labor among contracted farmers supplying tobacco to PMI (2023: 0.1%)⁴
• 99% of contracted farmers supplying tobacco to PMI who make a living income (2023: 96%)⁵
• 10 human rights impact assessments completed since 2018 in highest-risk countries (2023: 8)⁶
• 61% of PMI manufacturing facilities certified as carbon neutral (2023: 43%)
• First pre-certified environmental product declarations (EPD) published on IQOS ILUMA i series of devices

“We understand the importance of setting ambitious yet realistic targets that drive our business success. Our Sustainability Index has proven instrumental in ensuring our ambitions are balanced and our metrics are objective, while our enhanced nonfinancial data governance helps us report with precision and consistency,” said Jennifer Motles, Chief Sustainability Officer of PMI. “Our commitment to sustainability is inseparable from future-proofing our business, creating tangible impacts within our control and sphere of influence, and contributing to a transformation that extends beyond our company.”

The Integrated Report 2024 has been prepared with reference to the Global Reporting Initiative (GRI) Universal Standards (2021) and relevant topic-specific standards. The report takes into account guidance from the International Sustainability Standards Board (ISSB) of the IFRS Foundation, including using its SASB Standards, Integrated Thinking Principles, and Integrated Reporting Framework. PMI’s SASB Index and GRI Index, which also maps the principles and standards of the UN Global Compact (UNGC), is available on PMI.com. The report is accompanied by the PMI Sustainability KPI Protocol 2024, which provides a transparent explanation of how we define and measure progress for each Sustainability Index KPI.

Please visit pmi.com/sustainability to learn more and read the full Integrated Report 2024, as well as case studies and market stories and the Sustainability KPI Protocol 2024.

Philip Morris International: Delivering a Smoke-Free Future

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Philip Morris International is a leading international tobacco company, actively delivering a smoke-free future and evolving its portfolio for the long term to include products outside of the tobacco and nicotine sector. The company’s current product portfolio primarily consists of cigarettes and smoke-free products. Since 2008, PMI has invested over USD 14 billion to develop, scientifically substantiate, and commercialize innovative smoke-free products for adults who would otherwise continue to smoke, with the goal of completely ending the sale of cigarettes. This includes the building of world-class scientific assessment capabilities, notably in the areas of pre-clinical systems toxicology, clinical and behavioral research, as well as post-market studies. In 2022, PMI acquired Swedish Match—a leader in oral nicotine delivery—creating a global smoke-free champion led by the companies’ IQOS and ZYN brands. Following a robust science-based review, the U.S. Food and Drug Administration has authorized the marketing of Swedish Match’s General snus and ZYN nicotine pouches and versions of PMI’s IQOS devices and consumables—the first-ever such authorizations in their respective categories. Versions of IQOS devices and consumables and General snus also obtained the first-ever Modified Risk Tobacco Product authorizations from the FDA. As of December 31, 2024, PMI’s smoke-free products were available for sale in 95 markets, and PMI estimates that 38.6 million adults around the world use PMI’s smoke-free products. The smoke-free business accounted for approximately 39% of PMI’s total full-year 2024 net revenues. With a strong foundation and significant expertise in life sciences, PMI has a long-term ambition to expand into wellness and healthcare areas and aims to enhance life through the delivery of seamless health experiences. References to “PMI,” “we,” “our,” and “us” mean Philip Morris International Inc. and its subsidiaries. For more information, please visit www.pmi.com and www.pmiscience.com.

Forward-Looking and Cautionary Statements and relevant disclaimers

This press release contains projections of future results and goals and other forward-looking statements, including statements regarding expected performance, business plans and strategies. Achievement of future results is subject to risks, uncertainties, and inaccurate assumptions. In the event that risks or uncertainties materialize, or underlying assumptions prove inaccurate, actual results could vary materially from those contained in such forward-looking statements. Pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, PMI is identifying important factors that, individually or in the aggregate, could cause actual results and outcomes to differ materially from those contained in any forward-looking statements made by PMI.

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PMI’s business risks include: excise tax increases and discriminatory tax structures; increasing marketing and regulatory restrictions that could reduce our competitiveness, eliminate our ability to communicate with adult consumers, or ban certain of our products in certain markets or countries; health concerns relating to the use of tobacco and other nicotine-containing products and exposure to environmental tobacco smoke; litigation related to tobacco and/or nicotine use and intellectual property; intense competition; the effects of global and individual country economic, regulatory and political developments, natural disasters and conflicts; the impact and consequences of Russia’s invasion of Ukraine; changes in adult smoker behavior; the impact of natural disasters and pandemics on PMI’s business; lost revenues as a result of counterfeiting, contraband and cross-border purchases; governmental investigations; unfavorable currency exchange rates and currency devaluations, and limitations on the ability to repatriate funds; adverse changes in applicable corporate tax laws; adverse changes in the cost, availability, and quality of tobacco and other agricultural products and raw materials, as well as components and materials for our electronic devices; and the integrity of its information systems and effectiveness of its data privacy policies. PMI’s future profitability may also be adversely affected should it be unsuccessful in its attempts to introduce, commercialize, and grow smoke-free products or if regulation or taxation do not differentiate between such products and cigarettes; if it is unable to successfully introduce new products, promote brand equity, enter new markets or improve its margins through increased prices and productivity gains; if it is unable to expand its brand portfolio internally or through acquisitions and the development of strategic business relationships; if it is unable to attract and retain the best global talent, including women or diverse candidates; or if it is unable to successfully integrate and realize the expected benefits from recent transactions and acquisitions. Future results are also subject to the lower predictability of our smoke-free products’ performance.

PMI is further subject to other risks detailed from time to time in its publicly filed documents, including PMI’s Annual Report on Form 10-K for the fourth quarter and year ended December 31, 2024. PMI cautions that the foregoing list of important factors is not a complete discussion of all potential risks and uncertainties. PMI does not undertake to update any forward-looking statement that it may make from time to time, except in the normal course of its public disclosure obligations.

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Contacts

Philip Morris International
David Fraser
T. +41 (0)58 242 4500
E. david.fraser@pmi.com

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