Jacek Olczak, Philip Morris International CEO, joins 'Money Movers' to discuss q2 earnings and smoke-free products.

Stamford

Philip Morris International CEO Jacek Olczyk discussed the company's ongoing transition toward smoke-free products, emphasizing strong growth in its Zyn product line following previous supply constraints. Olczyk noted that capacity expansion in the US has enabled the company to better meet market demand, resulting in significant growth rates for Zyn.

He also addressed regulatory hurdles, particularly in the US, citing improved dialogue with the FDA and optimism about pending product approvals. Olczyk outlined a selective strategy for introducing new products like VIV in legitimate markets, aiming to ensure compliance and profitability. The CEO expressed confidence that these efforts are positively impacting the company's performance and outlook.

Philip Morris International CEO on moving toward smoke-free products

Joining us this morning in a CNBC exclusive is Philip Morris, international CEO, Jacek Olczyk. Jacek, welcome. We like to, we should point out, the stock's been one of the great outperformers of the year so far. But people are pointing to this relative weakness in ZIN. Does ZIN have an issue? No, ZIN doesn't have any issues. We're coming from a very difficult four quarters in a row, and we had undersupply capacity constraints created a massive out of stock at the retail consumer level. And I'm very pleased that we have accelerated our capacity expansion, capacity expansion in the US, which is also important. And we're now in the, I mean, I have the ability to fully supply the market. You know, I see on the sequential developments of ZIN, with the growth rates approaching 40%, I think it's pretty spectacular. So I am very pleased by the performance of the company in the second quarter, in the first half of the year. Yes, the stock price reacted. I think, you know, if you're cruising at our altitude and our speed of a transformation, which, you know, accelerates the revenue growth, profitability growth, expectations also are growing higher. So, you know, it's our job to somehow come closer to meet this expectation. Where does it leave sort of the goalposts for smoking alternatives, say, by the end of the decade? Well, if everything is aligned and, you know, consumers are ready to more and more ready to switch or leave the cigarettes behind. I mean, the biggest constraints which we have is the progress on the regulatory front. So you still have the markets which, you know, continue allowing the sales of cigarettes, but the banning alternatives. In the US in particular, I just do hope that, you know, FDA can accelerate its pace of processing of PMTAs almost to, I think, a record-breaking speed, which we see how quickly US can negotiate or renegotiate the trade deals. So I think if there is a will, if there is enough of an effort, things can really accelerate pretty fast. Is it a specific change in the Trump administration, the regulatory outlook for you, Jacek? What I can say that we have a more frequent and a more open and a transparent dialogue with FDA. So this all goes, you know, pretty well on the future. I can't tell when exactly our outstanding PMTAs will be processed. But the truth is that I do see the positively increase the dynamics in, you know, the contacts and the conversations with FDA compared to the past period. So I hope it's going to materialize the Dicosiloma, which is long outstanding and it's holding also our investment in a manufacturing in the US will be approved. And we have, you know, a few more pending PMTAs for the further expansion of the Zyn product. So I remain hopeful that, you know, hopefully this year, I mean the latest beginning of 26, we'll put all of this administrative, if you like, constraints behind us. A couple of headlines this morning from the CFO about the potential behind VIV. Can you sort of fill viewers into what's important to know about that? I mean, VIV we're trying to bring in a very selective market. As we know, category has its own electronic cigarettes, even products have its own constraints. There is quite a lot of illicit products still in the US, but also in other parts of the world. So, you know, we're trying to enter the markets when the conditions somehow guarantee us that, you know, there is a clear process of, you know, bringing a product to the market. The market is legitimate market, so we can properly sell to the adult consumer. And so far the strategy of being a very selective place pretty well that, you know, there is a strong volume growth, but we also already start seeing accretion from this products to our bottom line. So I think so far the strategy serves Philip Morris very well.

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