2026 Mid-year Financial Report

We confirm that to the best of our knowledge, the condensed set of interim consolidated financial statements prepared in accordance with the applicable accounting standards, gives a true and fair view of the assets, liabilities, financial position, and financial results of the issuer, Philip Morris ČR a.s., and its consolidated group and the description pursuant to Section 119 (2) (b) of Act No. 256/2004 Coll., on business activities on the capital market, as amended, contains a faithful summary of the information required under this provision.

Chairman of the Board of Directors Member of the Board of Directors

Philip Morris ČR a.s. Philip Morris ČR a.s.

Statutory Declaration of Persons Responsible for the Philip Morris ČR a.s. Mid-Year Financial Report 2

Company Profile and Important Events in the First Half of 2026 4

Business Results in the First Half of 2026 8

Risk Factors Related to Our Business and Industry 11

Forward-Looking and Cautionary Statements 17

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

Condensed Interim Consolidated Statement of Financial Position 19

Condensed Interim Consolidated Statement of Comprehensive Income 20

Condensed Interim Consolidated Statement of Changes in Equity 21

Condensed Interim Consolidated Cash Flow Statement 22

Notes to the Condensed Interim Consolidated Financial Statements 23

We are Philip Morris ČR a.s., an affiliate of Philip Morris International Inc. (PMI). We spearhead the transformation of the nicotine industry by providing adults who would otherwise continue to smoke or use other nicotine products with innovative smoke-free alternatives that reduce or have the potential to reduce risk compared to traditional cigarette consumption.

Since 2017, we have been offering our adult consumers a wide portfolio of innovative smoke-free products, which we are constantly expanding. In the Czech Republic and Slovakia, we distribute the heated-tobacco solutions, IQOS ILUMA i with TEREA, LEVIA and DELIA consumables, KT&G-licensed lil SOLID with Fiit consumables, as well as newly launched Bonds devices with compatible Blends tobacco consumables. At the same time, we distribute electronic cigarettes VEEV ONE, VEEV inPRIME and VEEV NOW ULTRA, nicotine pouches ZYN and provide a variety of related accessories and services to adult nicotine users. We are also providing adult smokers with popular international and local brands such Marlboro, L&M, Chesterfield, Petra, Sparta and RGD.

Philip Morris ČR a.s. is listed on the Prague Stock Exchange (Burza cenných papírů Praha) and holds a 99% interest in Philip Morris Slovakia s.r.o., registered in the Slovak Republic.

Philip Morris ČR a.s. runs the production plant in Kutná Hora, which has a tradition of more than two hundred years of tobacco processing. Today, the plant is one of the most modern, efficient and environmentally friendly PMI operations in the world, advancing its smoke-free future. The expansion of its capabilities to encompass nicotine pouch production has further strengthened its readiness for PMI's

smoke-free future.

In the Czech Republic and Slovakia, we employ more than 1,300 people, who make a significant contribution to the company's development and transformation. For this reason, we continuously strive to further improve our inclusive and high-standard work environment. We aim to offer the best possible conditions, so that every employee can fully meet their potential. The EQUAL SALARY certification in both countries validates our high performance in this area.

Being part of a global leading tobacco company, we keep focus on sustainability in any part of our business. We are mindful of and committed to our responsibility towards communities and environments in which we operate. We work hard to address sustainability issues that are material to us. At the same time, we have been contributing significantly to charitable projects across a wide range of organizations and specializations, including programs aimed at improving living conditions in communities.

• In Slovakia, ZYN became a fully integrated part of the Philip Morris Slovakia s.r.o. portfolio. Following the previous distribution model managed by external distributor Mirage, s.r.o., responsibility for the ZYN nicotine pouch business was transferred to Philip Morris Slovakia, enabling more unified portfolio management and stronger market execution.

• The IQOS ILUMA Starter Kit was launched on the Slovak market with the aim of increasing the accessibility of smoke-free alternatives for adult smokers.

• As part of ongoing portfolio optimization and creating space for new product innovations, the LEVIA Electric Purple and LEVIA Island Beat variants were discontinued during the first half of the year in Czechia.

• We expanded the ZYN portfolio in Czechia with five new variants across Mini Dry and Regular Moist, introducing new flavours and nicotine strengths to better meet diverse adult consumer preferences.

• In Slovakia we introduced a new single-pod format VEEV ONE across all 11 flavours, giving consumers greater flexibility to mix and match variants.

• VEEV ONE X expanded the portfolio with four extra-intense flavours supported by dedicated in-store activation in Czechia. Following this successful rollout, the same range of new flavours was launched in Slovakia in February.

• The L&M brand, long the best-selling cigarette brand in Slovakia, successfully retained its position as the Most Trusted Brand for the tenth consecutive year.

• Selected Chesterfield variants were migrated to Marlboro Crafted, reflecting the long-term decline in demand for Chesterfield products and the growing momentum of Marlboro Crafted in Czechia.

  February

• The ZYN and THUNDER portfolios underwent a packaging optimization in Slovakia, adjusting the number of pouches per pack. ZYN Mini variants were standardized to 15 pouches per pack, while ZYN Regular and THUNDER variants were standardized to 20 pouches per pack.

  March

• The IQOS ILUMA i portfolio in Czechia and Slovakia was expanded with a new permanent color variant, Electric Purple. The launch was supported by the Electric Dreams campaign, offering adult nicotine users the chance to win themed experiences inspired by music, travel, and culture, alongside other consumer prizes.

• We launched the ZYN DJ Car, a mobile brand experience combining a DJ stage and product showcase to engage adult ZYN

  consumers in Czechia in their leisure environments through unique, on-the-ground activations.

• Building on the success of the L&M Selection Duo Pack introduced in the previous year, we launched the limited-edition Marlboro Crafted Duo Pack. The limited edition was supported by an extensive communication campaign and contributed to the continued growth of the Marlboro brand in the Slovak market.

  April

• Rolled out a refreshed LEVIA brand identity and communication campaign across consumer touchpoints in Slovakia, followed by the launch of the enhanced LEVIA portfolio featuring new capsule flavors and supported by commercial and consumer activation in May.

• Philip Morris ČR a.s. published its 2025 Annual Financial Report, which provides a comprehensive overview of the company's financial and economic performance, as well as progress in environmental impact, social responsibility, and corporate governance.

  May

• In May we achieved a key milestone in smoke-free product expansion in our factory by opening a new ZYN nicotine pouch production line in Kutná Hora, strengthening manufacturing capacity and cementing the site's position as a leading European production hub.

• On 29 May, the Annual General Meeting of Philip Morris ČR a.s. shareholders took place. Among the resolutions, the shareholders approved a gross dividend of CZK 1,100 per share.

• A new heated tobacco device brand, BONDS by IQOS, was launched in the Czech market, available in three color variants. At the same time, BLENDS compatible tobacco consumables by the makers of Marlboro were introduced, offering four tobacco variants.

• Expanded the IQOS ILUMA i portfolio in Slovakia with the limited-edition REMIX collection, inspired by music and complemented by a range of matching accessories. The launch also introduced the limited-edition TEREA REMASTER pack design featuring eight selected variants. Following its successful debut in Slovakia, the collection was rolled out in Czechia in June.

• IQOS participated in one of Slovakia's largest festivals with its unique IQOS Curious City concept zone.

• Launch of ZYN Days, a recurring monthly retail activation program designed to drive store traffic, strengthen brand engagement, and create memorable experiences for adult nicotine users in Czechia through exclusive, lifestyle-focused rewards.

• A limited edition of all L&M LOFT variants was launched, encouraging adult smokers to view the city from a different perspective and highlighting that even familiar places can offer new and unexpected experiences.

  June

• As part of our ongoing portfolio optimization, we also decided to discontinue the RGD brand in Slovakia, with its gradual phase-out beginning in June.

• During May and June, the VEEV brand was supported by a global brand campaign under the slogan "VEEVolený pre zmenu" ("Chosen for Change"). The campaign aimed to strengthen awareness of VEEV as the leading brand in the Slovak market, reinforcing its positioning and increasing brand visibility among adult nicotine users.

• We strengthened ZYN's connection with adult consumers through a high-profile presence at the Czechia's largest cultural and music events-including Rock for People, Beats for Love, Karlovy Vary International Film Festival, and Colours of Ostrava.

Disability and neurodiversity are a part of everyday life for many people. Globally, one in six individuals lives with a disability or a form of neurodiversity, and many of these conditions are not immediately visible. Despite growing awareness, conversations around accessibility and inclusion can still be challenging in the workplace, both for those who may need support and for those who wish to provide it.

PMI is committed to creating an environment where everyone has the opportunity to develop new skills and grow, both professionally and personally. Achieving this requires ensuring that all employees have equitable opportunities and the support they need to succeed.

To help foster a more inclusive and supportive workplace, PMI launched Empower Ability, a global initiative designed to raise awareness, encourage understanding, and promote open dialogue around disability, neurodiversity, and accessibility.

Philip Morris ČR a.s. joined the initiative in 2026. Its official introduction to employees took place in June, marked by the opening of Accessibility Centers at both the Prague headquarters and the Kutná Hora factory. These dedicated spaces provide practical support for employees with a diverse range of needs through assistive technologies, workplace adaptations, and other resources designed to enhance accessibility, comfort, and overall wellbeing. The centers serve as a tangible demonstration of our commitment to creating a workplace where everyone can thrive.

However, the journey began even earlier. In April 2026, comprehensive accessibility assessments were conducted in line with ISO 21542 standards to identify barriers and opportunities for improvement in the physical work environment. Based on the findings, a detailed action plan was developed to guide the creation of more accessible and barrier-free facilities.

Empower Ability has been translated into a broad range of practical actions across the organization. These include interactive workshops that help employees better understand the experiences and needs of colleagues with disabilities and neurodiverse conditions; close collaboration with specialized non-governmental organizations and external experts; comprehensive reviews of workplace accessibility; and assessments of employee benefits to ensure they address the specific needs of colleagues with disabilities. Together, these activities represent just a few elements of a comprehensive and long-term program that is being progressively implemented across Philip Morris ČR

a.s. to foster a more inclusive, accessible, and supportive workplace for all.

The program is available to all employees, whether they have personal experience with disability, support team members in a managerial role, work alongside colleagues with different abilities, or simply want to broaden their understanding of the topic.

Inclusion is not a new concept at PMI. It is embedded in our culture and reflects our long-standing commitment to fostering a workplace where diverse perspectives, experiences, and abilities are valued. Through initiatives that are part of the Empower Ability, we continue to strengthen a culture based on inclusion, equal opportunities, and a strong sense of belonging for all employees.

‌"I believe everyone deserves the opportunity to reach their full potential and feel respected at work. I am therefore proud that we launched Empower Ability to further strengthen our inclusive workplace culture."

Fabio Costa, Chairman of the Board of Directors and Managing Director of Philip Morris ČR a.s.

Business conditions in the first half of 2026 remained broadly stable compared with the corresponding period of 2025. A significant operational milestone was achieved in May 2026 with the successful start of commercial production of ZYN nicotine pouches at the Kutná Hora manufacturing facility. This development advances our progress toward a smoke-free future and strengthens the facility's role within the Czech manufacturing sector.

The combustible market, particularly in the Czech Republic, continued to contract, in line with broader global trends. This decline reflected both consumer responses to price increases and an ongoing shift toward other nicotine categories. As our portfolio has a comparatively limited presence in lower-priced segments, our volumes were more affected than the market overall. We continue to implement targeted commercial and portfolio initiatives to address this structural imbalance, although their benefits are expected to emerge progressively over time.

The nicotine market continued to evolve toward a broader, multi-category structure, with nicotine pouches and e-vapor products becoming increasingly established and competitors addressing a range of price segments. In response, we continued to develop our smoke-free portfolio to meet changing consumer preferences and reach a broader audience of legal-age nicotine users, while maintaining our longstanding commitment to product quality and integrity.

Consolidated revenues, net of excise tax and VAT, remained broadly stable compared with the first half of the previous year, reaching CZK 10.7 billion. This performance included an unfavorable currency impact of 0.8 percentage points, primarily reflecting the depreciation of the euro against the Czech koruna and its translation effect on the Slovak results at a consolidation level. On a constant currency basis,

1 Shipments in the Czech Republic include cigarettes, volume tobacco for make-your-own cigarettes (0.60 g is the equivalent of one cigarette), and smoke-free products such as TEREA, BLENDS and DELIA heated tobacco consumables, LEVIA tobacco-free nicotine consumables and Fiit sticks from KT&G as well as VEEV ONE and VEEV inPRIME e-cigarettes consumables, VEEV NOW ULTRA disposables and ZYN nicotine pouches (all recalculated to cigarette equivalents).

2 Shipments in Slovakia include combustible portfolio, meaning cigarettes, and smoke-free products such as TEREA and DELIA heated tobacco consumables, LEVIA tobacco-free nicotine consumables and Fiit sticks from KT&G as well as VEEV ONE e-cigarettes consumables, VEEV NOW ULTRA disposables, ZYN and THUNDER nicotine pouches (all recalculated to cigarette equivalents).

consolidated revenues increased by 1.2% or CZK 0.1 billion compared with the first half of the previous year. Revenue growth was mainly driven by favorable net pricing across both the combustible and smoke-free portfolios (CZK 0.2 billion), alongside a positive volume and mix contribution from smoke-free products (CZK 0.2 billion). These effects were partly offset by lower combustible volumes (CZK 0.2 billion), reflecting continued market contraction and share pressure across both markets.

Profit from operations declined by 7.4% compared with the first half of the previous year, to CZK 1.8 billion, including a negative currency impact of 0.9 percentage points. The decline was primarily driven by lower combustible volumes, resulting in lower contribution from the conventional category across both markets, partially offset by favorable pricing and growth in smoke-free products (CZK 0.1 billion). In addition, interim-period profitability was partially impacted by the timing of cost allocations throughout the year (CZK 0.1 billion). Finance income remained broadly stable compared with the first half of 2025, with only a marginal decrease reflecting lower interest rates.

Together with a lower income tax expense resulting from a reduced tax base, net income for the period declined by 7.2% to CZK 1.5 billion, including a negative currency impact of 1.1 percentage points.

Philip Morris ČR a.s. reported domestic revenues, net of excise tax and VAT, of CZK 6.4 billion, broadly in line with the first half of the previous year. Revenues benefited from favorable pricing across both combustible and smoke-free products, contributing approximately CZK 0.1 billion, as well as a positive volume contribution of approximately CZK 0.1 billion from smoke-free products. These gains were partly offset by lower combustible product volumes, which reduced revenues by approximately CZK 0.2 billion.

The estimated combined market for cigarettes and heat-not-burn units declined by 4.2% compared with the same period of the previous year, to 6.4 billion units. The overall industry continues to evolve as alternative nicotine categories, including vaping and oral products, grow and attract consumer demand, resulting in a more diverse and fragmented competitive landscape.

The estimated combined market share of Philip Morris ČR a.s. reached 39.6%, a decrease of 0.2 percentage points compared with the same period of the previous year. This development mainly reflected pricing dynamics in the cigarette segment, which continued to encourage adult consumers to shift toward lower-priced products, a segment in which the company's portfolio has a comparatively limited presence.

Domestic shipments of combustible products, comprising cigarettes and fine-cut tobacco, decreased by 0.1 billion units compared with the same period of the previous year, to 1.6 billion units. This reflects both the contraction of the overall market and the development of the company's market share. Shipments of smoke-free products reached 1.2 billion units. Strong growth in vaping products more than offset lower shipments of heat-not-burn consumables, resulting in a modest overall increase in smoke-free product volumes.

Philip Morris Slovakia s.r.o. reported domestic revenues, net of excise tax and VAT, of EUR 126 million in the first half of the year, an increase of 5.9% compared with the same period in the previous year. The increase was mainly driven by higher smoke-free product volumes (EUR 8.5 million), followed by favorable net pricing of smoke-free products (EUR 1.1 million). These benefits were partly offset by lower combustible product volumes (EUR 1.5 million) and unfavorable combustible pricing (EUR 1.0 million).

The estimated combined market for cigarettes and heat-not-burn units reached 3.4 billion units in the first half of the year, representing a growth of 4.4% compared with the same period in the previous year. Growth was supported by both product categories.

The estimated combined market share of Philip Morris Slovakia s.r.o. reached 48.9%, a decrease of 1.4 percentage points compared with the same period of the previous year. This was mainly attributable to a 2.1 percentage point decline in cigarette market share, reflecting the company's limited presence in the growing value segment amid prevailing pricing dynamics. By contrast, the market share of heat-not-burn consumables increased by 0.7 percentage points, supported by a recovery in the category and the stabilization of consumption following the impact of the ban on characterizing flavors.

Domestic shipment volumes increased by 0.1 billion units compared with the same period of the previous year, primarily reflecting growth in smoke-free product categories. Shipments of combustible products remained broadly stable at 1.1 billion units. Smoke-free product shipments reached 0.7 billion units, reflecting the recovery and renewed growth of heat-not-burn products following the impact of the ban on characterizing flavors, as well as the strong performance of the vaping category.

Revenues from manufacturing services decreased slightly by 4.1% compared with the first half of the previous year, to CZK 1.2 billion. This development reflects the ongoing transformation of the Kutná Hora factory, including the gradual adjustment of conventional product activities and continued investments in new novelty product lines.

A key milestone was achieved in May with the start of commercial production on the new novelty product lines, representing an important step in strengthening the factory's future role within the company's evolving product portfolio. Further ramp-up activities are progressing as planned.

The following risk factors should be read carefully in connection with evaluating our business and the forward-looking statements contained in this 2026 Mid-year Financial Report of Philip Morris ČR a.s.

Any of the following risks could materially adversely affect our business, our operating results, our financial condition, and the actual outcome of matters as to which forward-looking statements are made in this report.

We are aware of the risks impacting our business and taking appropriate actions to mitigate them.

Our ability to grow profitability may be limited by our inability to successfully introduce new products, improve our margins through higher pricing and improvements in our brand mix, promote brand equity or develop strategic business relationships.

This can be influenced by several factors described below.

We face intense competition, and our failure to compete effectively could have a material adverse effect on our profitability and results of operations. We compete primarily based on product quality, brand recognition, brand loyalty, taste, innovation, packaging, service, marketing, advertising and retail price. We are subject to highly competitive conditions in all aspects of our business. The competitive environment and our competitive position can be significantly influenced by weak economic conditions, erosion of consumer confidence, competitors' introduction of lower-price products or innovative products, higher nicotine product taxes, higher absolute prices and larger gaps between retail price categories, and product regulation that diminishes the ability to differentiate nicotine products according to the level of their risk.

We may be unable to anticipate changes in adult consumer preferences or to respond to consumer behaviors, limiting our ability to further scale up our smoke-free products (SFP) and encourage current adult smokers who would otherwise continue to smoke to switch to smoke-free products. Our business is subject to changes in consumer preferences, which may be influenced by local economic conditions.

To be successful, we must:

• promote brand equity successfully;

• anticipate and respond to new consumer trends;

• ensure that our products meet our quality standards and consumer expectations;

• develop new products or acquire distribution rights to these in order to broaden brand portfolios;

• improve productivity;

• educate and convince adult smokers to convert to our smoke-free nicotine products;

• ensure effective adult consumer engagement, including communication about product characteristics and usage of smoke-free nicotine products;

• provide excellent customer care;

• ensure adequate production capacity to meet demand for our products; and

• be able to protect or enhance margins through price increases.

  In periods of economic uncertainty, adult consumers may tend to purchase lower-priced brands, and the volume of our premium-price and mid-price brands and our profitability could be materially adversely impacted as a result.

  Business model

  Our profitability, and consequently, the amount of our dividend pay-out reflects our dual role of being a full risk entrepreneur of combustible portfolio products and a limited risk distributor for smoke-free products.

  Our remuneration for commercialization of smoke-free products is based on a set margin on revenues from sales. As a limited risk distributor, we do not own intellectual property rights for smoke-free products and therefore do not absorb all the costs or bear the risks associated with such ownership. As our return is proportionate to our risk for commercializing smoke-free products, the impact of the sales volume variances of such products on our profitability is limited. Consequently, if the current consumer preference trend towards smoke-free products continues and volume declines of combustible portfolio products accelerate, we do not expect that over time the additional profit generated from increased sales of smoke-free products will offset the decreasing profits generated from the sales of combustible portfolio products.

  Consumption of combustible tobacco products continues to decline. This decline is due to multiple factors, including increased taxes and tax-driven pricing, governmental actions, the diminishing social acceptance of smoking, and the continuing prevalence of illicit products.

  Illicit trade

  We lose revenues as a result of insufficient law enforcement to protect legal market from counterfeiting, contraband and cross-border purchases. Large quantities of counterfeit cigarettes are sold in the international market. We believe that Marlboro is the most heavily counterfeited international cigarette brand, although we cannot quantify the revenues we lose as a result of this activity. In addition, our revenues are reduced by contraband and legal cross-border purchases. The volume of the illicit cigarette market in the Czech Republic has been growing in recent years, reaching one of the highest levels in 20253.

  Talent attraction and retention

  Our ability to implement our strategy of attracting and retaining the best talent may be impaired by the decreasing social acceptance of cigarette smoking. To be successful, we must continue transforming our culture and ways of working, align our talent and organizational design with our increasingly complex business needs, and innovate and transform to a consumer-centric business.

  ‌Risks Related to Strong Regulations within our Industry

  The tobacco and nicotine industry is heavily regulated and subject to significant governmental measures to reduce and/or prevent smoking and the use of tobacco products. Their abrupt changes can have a significant impact on consumer preferences and their late communication can disrupt the production and availability of our products in the market. There is also a risk that regulation of tobacco and nicotine products will not be differentiated according to the risk profile of individual products and law enforcement will not adequately protect those under 18 years of age. This chapter describes risks we face in relation to current or anticipated developments in each regulatory area.

  Excise tax

  Tobacco products are subject to excise taxes with tax rates expressed in currency units per physical quantity which requires their periodic adjustments for inflation. There are risks that the excise tax rates in neighbouring countries will be raised less than in the domestic country which could encourage domestic consumers to buy tobacco and nicotine products in other countries and discourage consumers in other countries from buying tobacco and nicotine products in the domestic country, as well as that the excise tax increases will lead to price increases higher than inflation, which might reduce demand for our products. The revision of the EU Tobacco Excise Directive (2011/64/EU) launched in 2025 also reduces the predictability of our business environment. The proposal aims to increase minimum tax rates and harmonize definitions and administrative procedures for tobacco and nicotine products. The proposed entry into force is in 2028. However, the proposal is subject to unanimous adoption by the Council and until then, its business impacts remain to be seen.

  In the Czech Republic, Act no. 349/2023 Coll. amending certain laws in connection with the consolidation of public budgets. amended also Act no. 353/2003 Coll. on excise taxes. This amendment came into force on January 1, 2024 and introduced the following changes:

  3 Source: KPMG report - Illicit Cigarette Consumption in Europe - 2025 Results.

• a four-year calendar of tobacco excise tax increases for years 2024 to 2027. As of February 1, 2024, the specific component of the cigarette excise tax rate increased by 10% and the minimum tax rate increased by 20%. The excise tax rate on tobacco for smoking increased by 10%. In 2025-2027, these tax rates increased and will increase by 5% each year. The ad valorem component of the cigarette excise tax remains unchanged (at 30%). The excise tax rate on heated tobacco products increased by 15% in 2024, and increased and will increase by 15% annually in 2025-2027 respectively. These excise tax increases are accompanied by sell-by-date anti-forestalling regulation applicable to cigarettes with a three-month period and heated tobacco products with a six-month period.

• the introduction of an excise tax on e-liquids for e-cigarettes with a tax rate of CZK 2.5 per ml in 2024 with further increases up to CZK 10 per ml in 2027 and on nicotine pouches with a tax rate of CZK 400 per kg with further increases up to CZK 1700 per kg in 2027.

  The table shows tax rates for 2023 - 2027:
  	2023	2024	2025	2026	2027
  Cigarettes
  - specific component (CZK per 1000 sticks	1,970	2,170	2,280	2,390	2,510
  - ad valorem component (%)	30%	30%	30%	30%	30%
  - minimum excise tax (CZK per 1000 sticks	3,520	4,220	4,440	4,660	4,890
  Tobacco for smoking (CZK per kg)	3,000	3,300	3,470	3,650	3,830
  Heated tobacco products (CZK per kg of tobacco)	3,000	3,450	3,970	4,570	5,260
  E-liquids for e-cigarettes (CZK per ml)	n/a	2.5	5.0	7.5	10.0
  Nicotine pouches (CZK per kg)	n/a	400	800	1,200	1,700

  In Slovakia, Act no. 530/2023 Coll. amending certain laws in connection with the consolidation of public budgets amended also Act no. 106/2004 Coll. on tobacco excise taxes. As of February 1, 2024, the specific tax rate on cigarettes increased by 8%, the ad valorem component increased by 2 percentage points, the minimum excise tax on cigarettes increased by 12%, the excise tax rate on fine-cut tobacco increased by 37% and the excise tax rate on heated tobacco products increased by 13%.

  Later in 2024, Act no. 106/2004 Coll. on tobacco excise taxes was further amended by:

• Act no. 233/2024 Coll. amending the Act on tobacco excise tax;

• Act no. 354/2024 Coll. amending the Act on value added tax and some other acts;

• Act no. 278/2024 Coll. amending certain acts in connection with the consolidation of public budgets.

  These amendments came into force throughout the second half of 2024 and introduced the following changes:

• a four-year calendar of tobacco excise tax increases for years 2025 to 2028;

• the introduction of excise taxes as of February 1, 2025, to all heated products without tobacco or only partially with tobacco, chewing tobacco, sniffing tobacco, electronic cigarettes and nicotine pouches;

• a further increase of excise taxes on electronic cigarettes, nicotine pouches, chewing tobacco and sniffing tobacco in 2027;

• excise tax increases on cigarettes, tobacco for smoking, cigars, cigarillos and heated tobacco products in 2026 and 2028. The ad valorem component of the cigarette excise tax remains unchanged (at 25%).

  The table shows tax rates for 2023 - 2028:
  	2023	2024	2025	2026	2027	2028
  Cigarettes
  - specific component (€ per 1000 sticks)	84.6	91.3	91.3	102.5	102.5	113.5
  - ad valorem component (%)	23%	25%	25%	25%	25%	25%
  - minimum excise tax (€ per 1000 sticks	132.1	148.0	148.0	166.2	166.2	182.0
  Tobacco for smoking (€ per kg)	101.3	139.0	139.0	177.0	177.0	209.5
  Heated tobacco products containing only tobacco (€ per kg of tobacco)	187.8	211.3	211.3	238.1	238.1	264.8
  Heated products without tobacco (€ per kg of filling)	n/a	n/a	211.3	238.1	238.1	264.8
  E-liquids for e-cigarettes (€ per ml)	n/a	n/a	0.2	0.2	0.3	0.3
  Nicotine pouches (€ per kg)	n/a	n/a	100.0	100.0	200.0	200.0

  Tobacco and nicotine products regulation

  There is a risk that regulation of tobacco and nicotine products will not be differentiated according to the health risks which would hinder our ability to inform adult users about the relative risks of individual products.

  In the EU, tobacco and nicotine products are regulated by the Tobacco Products Directive (2014/40/EU), which entered into force on May 19, 2014, and became applicable in the EU Member States as of May 20, 2016.

  The legislation lays down rules on - among others - the manufacturing, presentation and sale of tobacco and related products, including certain rules for the commercialization of e-cigarettes and novel tobacco products, such as:

• the prohibition on placing on the market of tobacco products containing flavorings in any of their components, such as filters, papers, packages, capsules, or any technical features allowing modification of the smell or taste of the tobacco products concerned or their smoke intensity, covering cigarettes, roll-your-own tobacco, and heated tobacco products (the so-called "flavor ban");

• a pre-launch notification requirement;

• enlarged, combined health warnings covering 65% of the main surfaces of cigarette packs and roll-your-own tobacco, as well as dedicated health warnings for other types of tobacco and related products;

• enhanced reporting obligations;

• the extension of the "flavour ban" to heated tobacco products, which became effective on November 23, 2022;

• tracking and tracing requirements for cigarettes and roll-your-own tobacco aiming to increase efficiency of illicit trade prevention, extended to other tobacco products such as heated tobacco products as of May 20, 2024.

  In the Czech Republic, the Directive is transposed by Act no. 110/1997 Coll. on foodstuffs and tobacco products and other related laws together with:

• Decree no. 261/2016 Coll. on tobacco products

• Decree no. 37/2017 Coll. on electronic cigarettes and herbal products for smoking

  In addition to EU-level harmonization, Czech domestic legislation provides for supplementary rules applicable to electronic cigarettes and nicotine pouches:

• Decree No. 141/2023 Coll. regulates nicotine pouches by setting maximum nicotine limits, and banning packaging designs that appeal to young people (applicable from July 2023)

• amendment to Decree No. 37/2017 Coll. regulates electronic cigarettes by prohibiting certain flavours and packaging that appeals to young people (applicable from December 2025, with a sell-by-date period until the end of June 2026).

In Slovakia, the Directive is transposed by Act no. 89/2016 Coll. on the manufacture, labelling and sale of tobacco products and related products and on the amendment and supplement to selected laws. On February 13, 2024, the Slovak Parliament approved the amendment to Act no. 89/2016 Coll. on the manufacture, labelling and sale of tobacco products and related products, which transposed new provisions, including the extension of the "flavour ban" to heated tobacco products. The amendment entered into force on January 1, 2025.

The objectives of the EU Directive 2019/904 ("Single-Use Plastics Directive" or "the Directive") are to prevent and reduce the impact of certain plastic products on the environment, in particular the aquatic environment, and on human health, as well as to promote the transition to a circular economy, with innovative and sustainable business models, products, and materials, thus also contributing to the efficient functioning of the internal market4.

In order to achieve its objectives, the Directive introduces various measures for various types of goods. In the area of our business, the Directive concerns tobacco products with filters and filters marketed for use in combination with tobacco products. Specifically, under the Directive, Member States were required to introduce marking requirements on product packaging and implement Extended Producer Responsibility Schemes ("EPR"), which requires producers to contribute to costs associated with the cleaning and collection of littered tobacco post consumption waste in public, as well as to cost for awareness-raising measures designed to inform consumers to correctly dispose of cigarette butts and thereby reduce litter. Measures were implemented gradually in several stages with EPR fully in place in the EU Member States by January 5, 2023. In the Czech Republic the effective date for EPR for producers of tobacco products with filters was January 1, 2023, while in Slovakia it was December 1, 2024.

4 Article 1 of the Directive 2019/904 of June 5,2019 on the reduction of the impact of certain plastic products on the environment.

To ensure the collective fulfilment of the obligations of manufacturers of tobacco products with filters and filters placed on the market for use in combination with tobacco products in the territory of the Czech Republic, Philip Morris ČR a.s., in accordance with the requirements of Act No. 243/2022 Coll.5, became one of the founders of joint-stock company NEVAJGLUJ a.s. (hereinafter referred to as "NEVAJGLUJ") with a stake of 24%. NEVAJGLUJ was registered in the Commercial Register in March 2023, in July 2023 it submitted an application for authorization to operate a collective system (EPR system), and the authorization was granted by the Ministry of Environment of the Czech Republic on October 10, 2023. Philip Morris ČR a.s. is being represented in statutory bodies of the NEVAJGLUJ, namely holds a position of the Chairman of the Board of Directors, and also one member of the Supervisory Board. More information on EPR system NEVAJGLUJ in the Czech Republic is available at https://www.nevajgluj.cz.

In addition to providing financial support to help municipalities cover the costs associated with the clean-up and collection of littered tobacco post-consumption waste in public spaces, NEVAJGLUJ continued its intensive awareness-raising efforts. At the beginning of the year, the company organized the expert conference "Littering: How to Keep Municipalities Clean", which provided a platform for sharing experiences and best practices among experts, municipal representatives, and organizations dedicated to maintaining clean public spaces. NEVAJGLUJ also remained a partner of the Radio Blaník Summer Concert Tour, using these events to engage tens of thousands of visitors across the Czech Republic. Compared to the previous year, the 2026 summer campaign was significantly expanded, with a substantial increase in the number of city light displays and billboards highlighting the importance of proper cigarette butt disposal and reinforcing the message that cigarette butts belong in the bin.

In Slovakia, Philip Morris Slovakia s.r.o. became one of the founders of joint-stock company SPAK-EKO a.s. with a stake of 25%. SPAK-EKO

a.s. was registered in the Commercial register in September 2023. Philip Morris Slovakia s.r.o. is being represented in statutory bodies of SPAK-EKO a.s., namely holds a position of the Chairperson of the Board of Directors, and one member of the Supervisory Board. In order to ensure collective compliance with the obligations of manufacturers of tobacco products with filters and filters placed on the market for use in combination with tobacco products in the territory of the Slovak Republic, in January 2025 SPAK-EKO a.s. proposed the Ministry of the Environment of the Slovak Republic to conclude a voluntary agreement that would recognize the SPAK-EKO a.s. system as the representative of the sector to which the obligations apply.

Since then, the Ministry of the Environment has not responded to the offer of a voluntary agreement and has not yet prepared an official legislative solution for the implementation of the directive. In July 2026, the European Commission issued a reasoned opinion in the infringement proceeding and again drew attention to the insufficient implementation of the rules of EPR arising from the directive, as regards tobacco products with filters containing plastic. In Slovakia, for the time being, there functions a voluntary EPR system for filters under the management of SPAK-EKO a.s., the problem remains the lack of legislative anchoring, for which the system cannot yet function as a full-fledged legal framework in accordance with EU requirements.

We also face risk factors arising from adverse developments in the economic situation and external environment which could affect our financials, disrupt our supply chain, manufacturing capabilities, and distribution channels or undermine our data protection efforts. Some risks can be anticipated, and appropriate business-continuation plans can be adopted in advance but some risks, for example the global events such as covid-19 pandemic or war in Ukraine, cannot.

The overall macroeconomic environment in the first half of 2026 was shaped by continued GDP growth, easing inflationary pressures and volatility driven by geopolitical developments. These factors continued to influence both our cost base and revenue performance throughout the period.

In the first half of 2026, the Czech economy continued to grow, with real GDP increasing year on year by 2.2% in the first quarter and by 1.9% in the second quarter6. Inflation rate remained close to the Czech National Bank's target, reaching 2.1% by the end of June7. Overall price stability contributed to a more predictable environment for households and supported domestic demand conditions.

5 Act No. 243/2022 Coll. on the reduction of the impact of certain plastic products on the environment.

6 Source: Quarterly GDP estimates | Czech Statistical Office

7 Source: Inflation, Consumer Prices | Czech Statistical Office

Natural gas and electricity remained the primary energy inputs at our production plant in Kutná Hora. Utility costs slightly decreased during the first half of 2026, partially driven by favorable price developments and partially by lower consumption. Geopolitical developments in the Middle East, however, continue to pose a risk of increased volatility in energy prices.

GDP growth in Slovakia corresponded to 0.9% in the first quarter and 0.8% in the second quarter 0.8% for 20268, continuing in similar pace as last year, while inflation reached 3.5% in June9. Consumer sentiment remains fragile, though modest real wage growth continues to support spending.

According to the latest projections of CNB for 2026, it is expected that inflation will decrease towards 2.0%, GDP to continue to grow at stable 2.2%10. All of this should maintain stable unemployment, economic activity of both businesses and consumers leading to stability in consumer sentiment and consumer spending. Slovakia's economy is projected to grow modestly, with GDP rising by about 0.8% in 202611.

While official 2026 macroeconomic projections for the Czech Republic and Slovakia remain broadly positive to neutral, with continued GDP growth and stable labor markets, the outlook is subject to heightened external risks. In particular, the ongoing conflict involving Iran and the broader Middle East has increased volatility in global energy markets. Given the continued reliance of both economies on imported oil and gas, renewed energy price pressures could weigh on inflation, operating costs and consumer demand. Against this backdrop, we maintain a more cautious outlook for 2026 than implied by baseline economic forecasts. Our business remains exposed to consumer down-trading to cheaper nicotine products and cross-border transactions. We continue to implement productivity initiatives to manage our cost base and maximize investment returns.

Natural disasters, pandemics, armed conflict, threats of war, or other adverse political and/or economic developments could disrupt our supply chain, materials availability, manufacturing and/or distribution capabilities.

The impact of these risks also depends on factors beyond our knowledge or control, including their duration and severity or their recurrence. Despite our business continuity plans and other safeguards in place, our business, operations and financial results will depend on numerous continuously evolving factors that we may not be able to accurately predict.

We, as well as our business partners, use information systems to help manage business processes, collect, and interpret data and communicate internally and externally with employees, suppliers, consumers, customers and others. Some of these information systems are managed by third-party service providers. We are continuously evolving our approach to business continuity planning and backups to provide appropriate business resilience, particularly considering the increasing cyber threat landscape. Nevertheless, failure of these systems to function as intended, or penetration of these systems and systems owned and operated by our business partners by parties intent on extracting or corrupting information or otherwise disrupting business processes, could place us at a competitive disadvantage, result in a loss of revenue, assets, including our intellectual property, personal or other sensitive data, result in litigation and regulatory action, cause damage to our reputation and that of our brands and result in significant remediation and other costs.

Failure to protect personal data, respect the rights of data subjects, and adhere to strict data governance and cybersecurity protocols could subject us to substantial fines and other legal challenges under regulations such as the EU General Data Protection Regulation. As we are increasingly relying on digital platforms in our business, and as privacy laws in the jurisdictions in which we do business are introduced or become more stringent, the magnitude of these risks is likely to increase.

8 Source: Quarterly GDP data at constant prices chain | Statistical Office of Slovak Republic

9 Source: Indices of consumer prices (divisions) to three bases | Statistical Office of Slovak Republic

10 Source: Current forecast | Czech National Bank

11 Source: Economic forecast for Slovakia | European Commission

This report and related communications contain, and Philip Morris ČR a.s. may from time to time make, written or oral forward-looking statements, including statements contained in filings with the Czech National Bank or other authorities, in reports to shareholders and

in press releases and investor webcasts. You can identify these forward-looking statements by use of words such as "strategy," "expects," "continues," "plans," "anticipates," "believes," "will," "estimates," "intends," "projects," "goals," "targets" and other words of similar meaning. You can also identify them by the fact that they do not relate strictly to historical or current facts.

Philip Morris ČR a.s. cannot guarantee that any forward-looking statement will be realized, although we believe we have been prudent in our plans and assumptions. Achievement of future results is subject to risks, uncertainties, and inaccurate assumptions. Should any known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. Investors should bear this in mind as they consider forward-looking statements and whether

to invest in or remain invested in Philip Morris ČR a.s. securities.

This 2026 Mid-year Financial Report of Philip Morris ČR a.s. is based on the condensed interim consolidated financial statements of Philip Morris ČR a.s. and Philip Morris Slovakia s.r.o., prepared in accordance with International Financial Reporting Standards as adopted by the European Union.

Financial information included in this 2026 Mid-year Financial Report of Philip Morris ČR a.s. and its consolidated group for the half-year ended June 30, 2026, are not reviewed by the auditor.

Chairman of the Board of Directors Member of the Board of Directors

Philip Morris ČR a.s. Philip Morris ČR a.s.

as at June 30, 2026 (in CZK million)

The accompanying notes form an integral part of the condensed interim consolidated financial statements.

for the six months ended June 30, 2026 (in CZK million)

*The currency translation adjustments will be reclassified subsequently to profit or loss when specific conditions are met. The accompanying notes form an integral part of the condensed interim consolidated financial statements.

for the six months ended June 30, 2026 (in CZK million)

Attributable to equity holders of the Company

Note

capital

contributions

the mid-year

(unaudited)

the mid-year

(unaudited)

The accompanying notes form an integral part of the condensed interim consolidated financial statements

for the six months ended June 30, 2026 (in CZK million)

Effects of exchange rate changes on the balance of cash and cash equivalents held in

Comparative cash flow information for the six-month period ended 30 June 2025 has been re-presented to conform with the presentation adopted in the 2025 annual financial statements. The re-presentation had no impact on total cash flows, profit for the period or equity.

The accompanying notes form an integral part of the condensed interim consolidated financial statements.

at June 30, 2026

1. ‌General information

   Philip Morris ČR a.s. (the "Company") and its subsidiary Philip Morris Slovakia s.r.o. (the "Subsidiary") (together the "Group") produce, sell, distribute, and market tobacco products and innovative smoke-free nicotine products. The Company has a 99% interest in Philip Morris Slovakia s.r.o.

   Philip Morris ČR a.s. is a joint-stock company registered in the Czech Republic. The Company was incorporated on March 28, 1991, and its registered address is Kutná Hora, Vítězná 1, Czech Republic. Its headquarters is in Prague, and its manufacturing facility is in Kutná Hora.

   Philip Morris ČR a.s. is an affiliate of Philip Morris International Inc. ("PMI"). As at June 30, 2026, Philip Morris International Inc. is the ultimate controlling party of the Group.

   As at June 30, 2026, the only entity directly holding more than 20% of the registered capital of the Group was Philip Morris Holland Holdings B.V. (the "Parent company"), which held 77.6% of the registered capital.

   The Company has its primary listing on the Prague Stock Exchange (Burza cenných papírů Praha, a.s.), trading from July 13, 1993.

   These condensed interim consolidated financial statements were authorized for issue by the Board of Directors and the Supervisory Board on September 29, 2026.

2. ‌Basis of preparation

   These condensed interim consolidated financial statements have been prepared in accordance with IAS 34, "Interim Financial Reporting". They do not include all the information required for a complete set of IFRS financial statements. Accordingly, they should be read in conjunction with the Group's most recent annual consolidated financial statements as at and for the year ended December 31, 2025, which were prepared in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS").

3. ‌Accounting policies

   Except as described below, the accounting policies applied in these condensed interim consolidated financial statements are consistent with those applied in the last annual consolidated financial statements for the year ended December 31, 2025.

   Income taxes for interim periods are accrued using the tax rate that would be applicable to the expected total annual profit or loss.

   New standards, amendments, and interpretations effective from January 1, 2026 do not have a material impact on the condensed interim consolidated financial statements.

   IFRS 18 Presentation and Disclosure in Financial Statements

   IFRS 18 Presentation and Disclosure in Financial Statements, effective for annual reporting periods beginning on or after 1 January 2027, has not been early adopted by the Group. The Group has undertaken an initial assessment of the requirements of IFRS 18. The assessment remains ongoing and the Group is not yet in a position to reliably quantify the expected impact of the standard as of the date of approval of these condensed interim consolidated financial statements. Based on the work performed to date, the Group expects the main changes to relate to the presentation of the statement of profit or loss and related disclosures.

4. ‌Estimates

   The preparation of condensed interim consolidated financial statements requires management to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income, and expenses. Actual results may differ from these estimates.

   In preparing these condensed interim consolidated financial statements, the significant judgments made by management in applying the Group's accounting policies and the key sources of estimation uncertainty are consistent with those applied in the annual consolidated financial statements for the year ended December 31, 2025, except for changes in estimates required in determining the provision for income taxes.

   In preparing these condensed interim consolidated financial statements, we considered the ongoing military conflict in Ukraine, the related sanctions imposed on Russia and Belarus, developments in the Middle East, evolving international trade policies and other geopolitical developments that could affect the global economic environment. Based on our assessment, these developments have not had any material impact on the Group's operations, financial position, financial performance or cash flows, nor on these condensed interim consolidated financial statements. The Group does not conduct business activities directly in Russia or Belarus and continues to monitor potential developments and associated risks.

5. ‌Financial risk management
   1. Financial risk factors

      The Group's activities are exposed to a variety of financial risks: market risk, including foreign exchange and interest rate risk, credit risk and liquidity risk. These condensed interim consolidated financial statements do not include all financial risk management information and disclosures required in the annual financial statements and should be read in conjunction with the Group's annual consolidated financial statements as at December 31, 2025. There have been no changes in the risk management processes since year-end 2025, nor in any risk management policies.

   2. Liquidity risk

      Compared with year-end 2025, there were no material changes in the contractual undiscounted cash outflows or financial liabilities.

6. ‌Segment reporting

   An operating segment is a component of an entity that earns revenues and incurs expenses, and whose financial results are regularly reviewed by the Group's chief operating decision maker to make decisions about resource allocation and performance assessment. The chief operating decision maker has been identified as the Group's management team.

   The Group's management monitors the performance of the Group with reference to the geographical area covered by the Group's operations. The Group's management monitors performance with reference to the type of business activity in combination with the geographical area. The Group's reportable segments are the Manufacturing Service-related activities and the Distribution-related activities, further allocated to the Czech Republic and Slovak Republic markets.

   For decision-making and resource allocation purposes, the Group's management team reviews management profit from operations. Management profit from operations in segment reporting excludes other non-allocated operating income/expense, interest income/ expense and provision for income taxes, as these are centrally managed. Accordingly, such items are not presented by segment since they are not regularly provided by segment to the Group's management team.

   Information about total assets by segment is not disclosed because such information is not reported to or used by the Group's management team.

   The segment results for the period ended June 30, 2026 are as follows:

   (in CZK million)	Czech Republic (Distribution)	Slovak Republic (Distribution)	Czech Republic	Total
   Total gross segment revenues	7,449	3,068	-	10,517
   Inter-segment revenues	(1,045)	(6)	-	(1,051)
   Services provided	26	6	1,242	1,274
   External revenues	6,430	3,068	1,242	10,740
   Management gross profit	2,846	1,687	914	5,447
   Royalties	(216)	(85)	-	(301)
   Fixed manufacturing expenses	(70)	(47)	(570)	(687)
   Gross profit	2,560	1,555	344	4,459
   Distribution expenses	(1,069)	(668)	-	(1,737)
   Administrative expenses	(528)	(266)	(163)	(957)
   Management profit from operations	963	621	181	1,765

   (Manufacturing Services)

   All revenues from manufacturing services are realised in the Czech Republic, which is the Group's country of domicile.

   The segment results for the period ended June 30, 2025 are as follows:

   (in CZK million)	Czech Republic (Distribution)	Slovak Republic (Distribution)	Czech Republic	Total
   Total gross segment revenues	7,439	2,979	-	10,418
   Inter-segment revenues	(1,016)	(1)	-	(1,017)
   Services provided	5	-	1,295	1,300
   External revenues	6,428	2,978	1,295	10,701
   Management gross profit	2,948	1,726	919	5,593
   Royalties	(228)	(116)	-	(344)
   Fixed manufacturing expenses	(39)	(28)	(582)	(649)
   Gross profit	2,681	1,582	337	4,600
   Distribution expenses	(1,211)	(537)	-	(1,748)
   Administrative expenses	(571)	(210)	(181)	(962)
   Management profit from operations	899	835	156	1,890

   (Manufacturing Services)

   Royalties and fixed manufacturing expenses are excluded from management gross profit for the purpose of the Group's management team review. However, these amounts are included when determining profit from operations.

   A reconciliation of management profit from operations to profit before income tax is provided as follows:

   (in CZK million)	01/01/2026 - 30/06/2026	01/01/2025 - 30/06/2025
   Management profit from operations	1,765	1,890
   Other operating income /expense, net	(10)	5
   Interest income	121	146
   Interest expense	(28)	(29)
   Profit before income tax	1,848	2,012

   Depreciation, amortization and impairment charge included in management profit from operations allocated to individual segments in 2026 and 2025 are as follows:

   (in CZK million)	Czech Republic (Distribution)	Slovak Republic (Distribution)	Czech Republic	Total
   2026	61	23	224	308
   2025	53	22	285	360

   (Manufacturing Services)

   Revenues are derived from sales of tobacco products and related services. Breakdown of the revenues is as follows:

   (in CZK million)	01/01/2026 - 30/06/2026	01/01/2025 - 30/06/2025
   Sales of merchandise	9,495	9,401
   Sales of services	1,245	1,300
   Total	10,740	10,701

   Sales of services primarily relate to the Manufacturing Service segment in the Czech Republic, with an immaterial portion relating to services provided by the Distribution segments.

   Revenue analysis by timing of revenue recognition:
   (in CZK million)	01/01/2026 - 30/06/2026	01/01/2025 - 30/06/2025
   Sales recognized at the time of shipment	9,495	9,401
   Revenues recognized over time	1,245	1,300
   Total	10,740	10,701

   Revenues from customers or groups of customers under common control exceeding 10% of the Group's revenues: Revenue of CZK 2,999 million (2025: CZK 2,919 million) derived from one customer is included in the Czech Republic (Distribution) segment, and revenue of CZK 1,242 million (2025: CZK 1,295 million) derived from the PMI group of companies is included in the Manufacturing Services segment.

   The total of the Group's non-current assets, other than deferred tax assets and other financial assets, located in the Czech Republic is CZK 3,099 million (at December 31, 2025: CZK 2,540 million), of which CZK 2,995 million is used to support Manufacturing service-related activities (at December 31, 2025: CZK 2,455 million) and CZK 104 million to support Distribution-related activities (at December 31, 2025:

   CZK 85 million). Non-current assets located in the Slovak Republic, supporting only Distribution activities, amount to CZK 96 million (at December 31, 2025: CZK 93 million).

7. ‌Property, plant and equipment

Constructions

Equipment

paid

* Transfers represent capitalization of PP&E from construction in progress and advances paid.

All investments in property, plant, and equipment were financed by the Group's own resources.

Interest expense on lease liabilities, included in finance costs, amounted to CZK 12 million (2025: CZK 11 million).

Short-term leases and leases for which the underlying assets are of low value do not have a material effect on the condensed interim consolidated financial statements.

1. ‌Inventories

   (in CZK million)	30/06/2026	31/12/2025
   Materials	92	81
   Merchandise	1,406	1,532
   Total	1,498	1,613

   The allowance for obsolete and slow-moving inventories amounted to CZK 85 million as at June 30, 2026 (December 31, 2025: CZK 126 million).

   The costs of inventories recognized as an expense in the condensed interim consolidated statement of comprehensive income in the first six months of 2026 and included in costs of sales amounted to CZK 5,293 million (2025: CZK 5,108 million).

2. ‌Trade and other financial receivables and other non-financial assets

   (in CZK million)	30/06/2026	31/12/2025
   Trade financial receivables
   Third parties	1,235	920
   Related parties	106	37
   Other financial receivables
   Third parties	34	34
   Total	1,375	991
   Other non-financial assets
   Prepayments	134	101
   Receivables to employees	4	1
   Total	138	102
   Other non-current financial assets
   Long-term deposits	115	115
   Total	115	115

   Long-term deposits include CZK 104 million paid to the Customs Office in the Czech Republic in 2015 to secure excise tax liabilities for goods stored in warehouses. The remaining balance relates to minor security deposits for leased premises.

   Long-term deposits are measured at amortized cost, which equals the original deposit amount, as no interest accrues and no repayments occur. The Group assesses these assets for expected credit losses in accordance with IFRS 9.

3. ‌Cash and cash equivalents

   (in CZK million)	30/06/2026	31/12/2025
   Cash on hand	3	5
   Cash at banks	58	235
   Total	61	240

   Cash and cash equivalents and bank overdrafts for the purposes of the consolidated cash flow statement include the following:

   (in CZK million)	30/06/2026	31/12/2025
   Cash and cash equivalents	61	240
   Bank overdraft	-	(132)
   Total	61	108

   Transactions that did not require the use of cash and cash equivalents and were excluded from the consolidated statement of cash flows are as follows:

   (in CZK million)	01/01/2026 - 30/06/2026	01/01/2025 - 30/06/2025
   Non-cash operating activities:
   Trade and other financial receivables and other non-financial assets	1,467	908
   Trade and other financial liabilities and other non-financial liabilities	(6,284)	(6,448)
   Total Non-cash operating activities	(4,817)	(5,540)
   Non-cash investing activities:
   Purchase of PP&E	(178)	(1)
   Proceeds from sale of PPE	43	-
   Interest received	121	146
   Total Non-cash investing activities	(14)	145
   Total Non-cash financing activities	-	-

4. ‌Trade and other financial liabilities and other non-financial liabilities

1. ‌Expenses by nature - additional information

   (in CZK million)	01/01/2026 - 30/06/2026	01/01/2025 - 30/06/2025
   Own work capitalized	(21)	-
   Raw materials	273	312
   Energy and other consumables used	54	61
   Merchandise sold	4,870	4,648
   Services	2,043	2,010
   Royalties	301	344
   Employee benefits expense	1,070	982
   Depreciation and amortization	308	360
   Other	77	89
   Cost of sales, distribution, and administrative expenses	8,975	8,806

2. ‌Profit distribution

   Dividends approved in May 2026 by the Annual General Meeting amounted to CZK 3,020 million (CZK 1,100 per share). Dividends approved in May 2025 by the Annual General Meeting amounted to CZK 3,349 million (CZK 1,220 per share).

   Besides the dividends approved by Philip Morris ČR a.s., the Annual General Meeting of Philip Morris Slovakia s.r.o. approved dividends to non-controlling interests in the amount of CZK 1 million (2025: CZK 1 million).

3. ‌Related party transactions

   The Group considers the Parent company and other companies of the PMI group of companies ("Other related parties"), members of its Board of Directors, Supervisory Board and parties close to such members of management to be related parties.

   Related party transactions were conducted under terms comparable to those prevailing in arm's length transactions.

   The following transactions were carried out with related parties:
   a) Sales of merchandise and services to related parties within PMI (in CZK million)	01/01/2026 - 30/06/2026	01/01/2025 - 30/06/2025
   Sales of merchandise
   Other related parties	-	4
   Sales of materials
   Other related parties	4	2
   Sales of PP&E
   Other related parties	43	-
   Sales of services
   Other related parties	1,246	1,300
   Recharges
   Other related parties	2	4
   Interest income
   Other related parties	121	146
   Total	1,416	1,456
   b) Purchases of merchandise and services from related parties within PMI (in CZK million)	01/01/2026 - 30/06/2026	01/01/2025 - 30/06/2025
   Purchases of merchandise and materials
   Other related parties	4,778	4,832
   Purchases of PP&E and intangible assets
   Other related parties	178	1
   Purchases of services
   Other related parties	692	652
   Royalties
   Other related parties	301	344
   Total	5,949	5,829

   1. Dividends

      As of June 30, 2026, dividends approved by Philip Morris ČR a.s. and dividends approved for non-controlling interests by Philip Morris Slovakia s.r.o. had not yet been paid.

      The dividends paid to Philip Morris Holland Holdings B.V. in 2025 amounted to CZK 2,599 million.

      The dividends paid to non-controlling interests by Philip Morris Slovakia s.r.o. in 2025 amounted to CZK 1 million.

      Except for dividends, there were no other transactions with the Parent company during the last two years.

   2. Balances with related parties within PMI

      All intercompany transactions with related parties are ultimately settled through the PMI Group cash pooling arrangement. As a result, the Group does not maintain long-term or standalone trade receivables or trade payables with related parties outside the cash pool structure. Although the cash pooling arrangement operates on a bidirectional basis, the Group maintained a net deposit position throughout the reporting periods presented.

      (in CZK million)	30/06/2026	31/12/2025
      Receivables from related parties
      Other related parties	106	37
      Deposits
      Other related parties	8,674	9,141
      Total related parties assets	8,780	9,178
      Payables to related parties
      Other related parties	1,361	1,874
      Total related parties payables	1,361	1,874

      Receivables from and payables to related parties represent outstanding intercompany balances arising from transactions that have not yet been settled through the cash pooling arrangement and are of a short-term nature.

      Deposits with related parties include interest-bearing on-demand deposits (cash pool) of CZK 8,674 million with Philip Morris Finance S.A. (at December 31, 2025: CZK 9,141 million).

      Short-term loans and deposits within a cash pool are on-demand and are classified as Receivables from cash pooling arrangement in the Group's consolidated statement of financial position as at June 30, 2026, and as at December 31, 2025.

      The interest rate for on-demand deposits in the Czech Republic is calculated based on CZBRREPO with a variable margin. The interest rate for on-demand deposits in the Slovak Republic is calculated based on ESTR with variable margin. Funds can be withdrawn from the cash pool at any time without contractual restrictions. Interest is calculated on a daily basis and settled periodically in accordance with the cash pool agreement.

      The actual interest rates reflect the current money market and the nature of the cash pool agreement. The average effective interest rates of short-term loans and on-demand deposits for the half-year ended June 30, 2026 were 3.20 % p.a. (at June 30, 2025: 3.40 % p.a.) in the Czech Republic and 1.80 % p.a. (at June 30, 2025: 2.40 % p.a.) in the Slovak Republic.

   3. Contractual and other commitments to related parties

   Contractual and other commitments to related parties that are not recorded in the condensed interim consolidated financial statements are considered as obligations to exchange resources in the future under binding agreements.

   As at June 30, 2026, the Group had no material commitments in respect of related parties except for the future obligation to purchase services with a total estimated value of CZK 489 million (commitment value as at December 31, 2025: CZK 468 million).

   The Group has entered into a number of binding service agreements, under which some performance obligations are yet to be delivered. Those agreements mostly have a two or six-month termination notice period. The total estimated value of services to be purchased under these agreements during their respective termination terms is disclosed above.

   According to the agreements with trademark owners, Philip Morris Global Brands Inc., Philip Morris Products S.A. and CTPM International S.A., the Group has to pay royalties in respect of tobacco products sold in the Czech and Slovak Republic. During the first half-year ended June 30, 2026, the Group incurred under these agreements royalties expense of CZK 301 million (2025: CZK 344 million). The royalty expense reflects updated contractual terms effective 2025.These agreements shall continue indefinitely until terminated by either party.

4. ‌Contingent liabilities

   The Group does not have any pending legal, administrative or arbitration proceedings that had or might have a substantial effect on the financial situation of the Group.

5. ‌Subsequent events

No subsequent events have occurred after June 30, 2026, that would have a material impact on these condensed interim consolidated financial statements at June 30, 2026.

These condensed interim consolidated financial statements for the period ended June 30, 2026, were authorized for issue by the Board of Directors and have been signed below on its behalf.

Chairman of the Board of Directors Member of the Board of Directors

Philip Morris ČR a.s. Philip Morris ČR a.s.

‌REGISTERED ADDRESS

Philip Morris ČR a.s.

Vítězná 1, 284 03 Kutná Hora HEADQUARTERS

Karlovo náměstí 10, 120 00 Praha 2

TEL.: (+420) 266 702 111

Company ID No: 14803534 ISIN: CS000848869

LEI: 315700LNPHNXCMNLQC73

The company is registered in the commercial register maintained at the Municipal Court in Prague under the mark B 627.