Q1 2025 Philip Morris International Inc Earnings Call
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Speaker Change: Again, please be advised that today's conference is being recorded I would now like to hand, the conference over to your speaker today, James Bushnell, Vice President of Investor Relations and financial Communications. Please go ahead.
James Bushnell: Welcome and thank you for joining us.
James Bushnell: Earlier today, we issued a press release containing detailed information on our 2025 first quarter results.
James Bushnell: Press release is available on our website.
James Bushnell: <unk> Dot com.
James Bushnell: Our grocery of terms, including the definition for smoke free products as well as adjustments other calculations and reconciliations to the most directly comparable U S. GAAP measures non-GAAP financial measures cited in this presentation are available in exhibit 99, two to the Companys form 8-K dated April 23rd 2025.
James Bushnell: And on our Investor Relations website.
James Bushnell: Today's remarks contain forward looking statements and projections of future results or direct your attention to the forward looking and cautionary statements disclosure in today's presentation and press release for a review of the various factors that could cause actual results to differ materially from projections or forward looking statements.
Written & Directed by Lucas Van Gogh
Thank you for watching!
Speaker Change: I'm joined today by Emmanuelle bubble, Chief financial officer over to you Emmanuel.
Good Day, and thank you for standing by. Bye.
James Bushnell: Thank you James and welcome everyone in.
Welcome to the Philip Morris International 2025 First Quarter Results Conference Call at this time.
James Bushnell: In Q1, we delivered a very strong start to the year with all key elements of the business contributing strongly to deliver double digit increases inorganic net revenue operating income and.
All participants are in a listen-only mode.
After the speaker's presentation, there will be a question and answer session to ask a question during the session you will need to press star one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one on again. [inaudible]
James Bushnell: Adjusted diluted EPS in both constant currency and dollar terms.
James Bushnell: Our smokefree business performed exceptionally well across all areas.
James Bushnell: With shipment volumes up plus 14, 4% year on year.
Speaker Change: Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today. James Bushnell, Vice President of Investor Relations and Financial Communications, please go ahead.
James Bushnell: Organic net revenue growth of plus 20%.
James Bushnell: And outstanding organic gross profit growth of plus 33% as all smoked three smoke free categories expanded gross margin.
James Bushnell: Welcome, thank you for joining us. Earlier today we issued a press release containing detailed information on our 2025 first quarter results.
James Bushnell: This was especially fueled by the rapid growth of Zain and the continued volume momentum operating leverage and scale benefit of vehicles.
The press release is available on our website at PMI.com
James Bushnell: Our smokefree business now accounts for 44% of total gross profit as we continue to deploy our multi category strategy across markets and broaden our growth opportunities.
a glossary of terms including the definition for smoke-free products
James Bushnell: as well as adjustments, other calculations and reconciliation to the most directly comparable US GAAP measures .
for non-GAAP financial Measures cited in this presentation.
James Bushnell: are available in Exhibit 99.2 to the company's four make K dated April 23, 2025, and on our Investor Relations website.
James Bushnell: Iqos delivered close to plus 10% extra you adjusted I am as growth with continued strong performance, both in Japan, and Europe, Despite the utilization impact of characterizing flavor ban.
James Bushnell: Today's remarks contain forward-looking statements and projections of future results. I direct your attention to the forward-looking and cautionary statements disclosure in today's presentation and press release for a review of the various factors that could cause actual results to differ materially from projections or forward-looking statements.
James Bushnell: We expect double digit growth for the rest of the year.
James Bushnell: <unk> once again delivered strong growth in the U S with shipments increasing by an impressive plus 53% to reach 202 million cans.
I'm joined today by Emmanuel Babeau, Chief Financial Officer
Over to you, Emmanuel [inaudible]
Thank you James and welcome everyone.
James Bushnell: Hitting our initial expectations as demand remained strong and production capacity increase or ahead of schedule in the latter part of March enabling some initial replenishment of trade inventories.
James Bushnell: In Q1, we delivered a very strong start to the year with all key elements of the business contributing strongly.
James Bushnell: International Nicotine pouch can volumes also grew by plus 53% or by plus 182%, excluding the nordics demonstrating the global dynamism of this emerging category.
Our small free business performed exceptionally well across all areas.
James Bushnell: In E vapor. The Q1 performance was impressive demonstrating its increasing contribution within our multi category offering.
with Shipman volumes up plus 14.4% year-on-year
James Bushnell: Organic net revenue growth of plus 20% and outstanding organic growth profit growth of plus 33% as all three small free categories extended growth margin.
James Bushnell: Shipments more than doubled year on year and gross margin further expanded driven by strong growth in Europe, as we increase our distribution and commercial activities.
James Bushnell: This was especially fueled by the rapid growth of zine and the continued volume momentum operating leverage and scale benefit of icos
James Bushnell: Within Congress Tibor overall volume growth, coupled with strong pricing and ongoing cost initiatives.
Drove robust performance, despite notably negative geographic mix from increased volumes in lower margin markets.
James Bushnell: Our smoke-free business now accounts for 44% of total growth profit as we continue to deploy our multi-categories strategy across markets and broaden our growth opportunities.
Speaker Change: Overall, the very strong and increasingly profitable underlying growth of our smokefree business West.
Speaker Change: West coupled with very solid convertible resort and the added benefit of favorable shipment timing.
James Bushnell: ICOs delivered close to plus 10% HTU-adjusted IMF growth with continued strong performance both in Japan and Europe despite the annualization impact of the EU characterizing flavour ban.
Speaker Change: This allowed us to deliver plus 16% organic operating income growth and plus 250 basis points of expansion in adjusted Oi margin to reach 47% and resulted in strong double digit adjusted diluted EPS growth in both current and new.
James Bushnell: We expect double-edged growth for the rest of the year.
Then, once again, delivered strong growth in the U.S.
with shipments increasing by an impressive plus 53%.
Speaker Change: Troll and the lockdown despite currency headwinds.
Speaker Change: While it is early in the year and there are a number of uncertainty in the global economic outlook. We remain confident that we will achieve another year of superior growth.
to reach 200 million gans. [inaudible]
James Bushnell: Exceeding our initial expectations as demand remains strong and production capacity increases ahead of schedule in the latter part of March, enabling some initial replenishment of trade
Speaker Change: Such we now forecast double digit adjusted diluted EPS growth at prevailing exchange rates.
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James Bushnell: International nicotine pouch can volumes, also grew by plus 53%, or by plus 182%, excluding the Nordics, demonstrating the global dynamism of this emerging category.
Speaker Change: Yeah.
Speaker Change: Turning to the headline numbers, we delivered volume growth of plus three 9%, reflecting the very strong dynamism of our smoke free business.
Speaker Change: Combined with strong pricing and despite unfavorable combustible mix, we delivered double digit organic net revenue growth of plus 10, 2%, reaching nine $3 billion in total.
James Bushnell: In EVAPER, the Q1 performance was impressive, demonstrating its increasing contribution within our multi-category offering.
James Bushnell: Shipments more than double year-on-year and growth margin further expanded, driven by strong pot growth in Europe , as we increase our distribution and commercial activity.
Speaker Change: There was also a technical impact from the change in commercial model for the Indonesia below tier one cigarette segment, where we now act as the handling agent.
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James Bushnell: Within combustible, overall volume growth coupled with strong pricing and ongoing cost initiatives.
Speaker Change: This results in lower net revenue and cost of goods sold but has no meaningful impact on gross profit or operating income.
James Bushnell: Draw a robust performance, despite notably negative geographic mix from increased volumes in lower margin markets
Speaker Change: Excluding this effect, which will notably effect the first three quarters of the year.
Thank you.
James Bushnell: Overall, the very strong and increasingly profitable underlying growth of our smoke-free business.
Speaker Change: Organic net revenues grew by around plus 12%.
James Bushnell: was coupled with very solid combustible results and the added benefit of favorable shipment timing.
Speaker Change: And as I mentioned, our Smokefree business was the primary driver behind our organic adjusted Oi growth of plus 16% or plus 12, 8% in the lockdown.
James Bushnell: This allowed us to deliver plus 16% organic operating income growth, and plus 250 basis point of expansion in adjusted OI margin, to reach 40.7%.
Speaker Change: Q1, adjusted diluted EPS grew by plus 17, 3% in constant currency and by plus 12, 7% in dollar terms to $1 69.
James Bushnell: and resulted in strong double digit adjusted deleted EPS growth in both current neutral and the
Speaker Change: This includes a 7% unfavorable currency volumes no.
James Bushnell: While it is early in the year and there are a number of uncertainty in the global economic outlook, we remain confident that we will achieve another year of super growth.
Notably due to nonrecurring transactional losses in the quarter linked to currency volatility.
Speaker Change: This stronger than expected performance was primarily driven by the top line and gross margin results of our smoke free business.
James Bushnell: As such, we now focus WGT-adjusted dealeted EPS growth at prevailing action rates.
Thank you.
Speaker Change: <unk> zinc performance was further enhanced by the great work of our manufacturing team in accelerating capacity initiatives.
James Bushnell: Turning to the headline numbers, we delivered volume growth of plus 3.9% reflecting the very strong dynamism of our smoke-free business.
Strong iqos <unk> shipment growth includes a robust performance in Europe.
James Bushnell: combined with strong pricing and despite unfavorable combustible mix, we delivered double-digit organic net revenue growth of plus 10.2 percent, reaching 9.3 billion dollars in total.
Speaker Change: And around 1 billion unit in favorable shipment timing, which we expect to reverse in etch tool.
Speaker Change: This was complemented by the resilience of our combustible business.
Speaker Change: Yeah.
James Bushnell: There was also a technical impact from the change in commercial model for the Indonesia Bilote 1 cigarette segment where we now act as a handling agent.
Speaker Change: Looking at our category performance in more detail.
Speaker Change: Our Smokefree business grew net revenue by plus 24%.
Speaker Change: And gross profit by plus 33, 1%.
James Bushnell: This results in lower nature venue and coastal goods sold, but has no meaningful impact on gross profit or operating income.
Speaker Change: This led to an impressive plus 670 basis points of organic gross margin expansion to surpass 70% more than five points above the gross margin of convertible at the current category and geographic mix of Ssds.
James Bushnell: Excluding this effect, which will notably affect the first three quarters of the year, Organic net-driven news grew by around plus 12 percent.
Thank you very much.
Speaker Change: Yeah.
James Bushnell: And as I mentioned, our smoke free business was a primary driver behind our organic adjusted O.I. growth of plus 16% or plus 12.8% in dollar terms.
Speaker Change: As I mentioned this reflect an acceleration in gross margin expansion for all three smoke free categories, notably combined with a positive mix impact of XIENCE accretive unit economics.
James Bushnell: P1 Adjusted Deleted EPS, grew by plus 17.3% in constant currency and by plus 12.7% in dollar terms to $1.69.
Speaker Change: And pricing on both etch to use and zing.
Speaker Change: Very strong Iqos gross margin expansion reflects the powerful growth in scale effect of this large and growing business manufacturing productivity and a comparison benefit from our device shipments in the prior year when Illumina I was launched in Japan.
James Bushnell: This includes a seven cent unfavorable currency variance, notably due to non-recurring transactional losses in the quarter linked to currency volatility.
Speaker Change: On an organic basis convertible net revenues and gross profit grew by plus three eight and plus five 3% respectively.
Thank you.
James Bushnell: This stronger than expected performance was primarily driven by the top line and gross margin result of our smoke free business
Speaker Change: While pricing was strong and volume were positive there was notably negative geographic mix this quarter due to growth in markets, such as Turkey and Egypt.
James Bushnell: Excellent Zin performance was further enhanced by the great work of our manufacturing team in accelerating capacity initiative.
Speaker Change: In addition to the technical impact from Indonesia.
James Bushnell: Strong ICOs H.T.U. shipment grows, include a robust performance in Europe , and around 1 billion unit in favorable shipment timing, which we expect to reverse in H2.
Speaker Change: We expect both pricing and negative geographic mix to moderate over the rest of the year and target convertible gross margin expansion organically and in the Lockdowns.
Speaker Change: As expected input cost headwinds eased compared to recent years and based on current assumptions. We expect this to further improve in 2026.
This was complemented by the resilience of our combustible business.
Thank you for watching!
James Bushnell: Looking at category performance in more detail, our smoke free business grew net revenue by plus 20.4%.
Speaker Change: Taking a closer look at our volumes.
and Gross Profit by plus 33.1% [inaudible]
Speaker Change: Shipment growth of plus three 9% was primarily driven by our smokefree business with all categories contributing positively and placing us on track for a fifth consecutive year of total volume growth.
James Bushnell: This led to an impressive plus 670 basis point of organic gross margin expansion to surpass 70% more than five points above the gross margin of combustible at the current category and geographic mix of S.S.P.
Speaker Change: Smokefree volumes grew by plus 14, 4%.
Speaker Change: Both our full year target range of plus 12% to plus 14%.
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James Bushnell: As I mentioned, this reflects an acceleration in gross margin expansion for all three smoke-free categories, notably combined with the positive mixed impact of Zins' creative unit economics and pricing on both HTUs and Zins.
Speaker Change: Reflecting very positive contribution from Iqos zinc and lead.
Speaker Change: In addition to the growth of these three brands, which I covered earlier.
Speaker Change: I'd also note that our all smoke free business include U S moist snuff.
James Bushnell: Very strong eye-cose growth margin expansion reflects the powerful growth and scale effect of this large and growing business, manufacturing productivity, and a comparison benefit from higher device shipment in the prior year when Illuma Eye was launched in Japan.
Speaker Change: We continue even snooze.
Speaker Change: Which declined modestly in the quarter.
Speaker Change: Despite these oral smoke free product shipment growth accelerated versus the prior quarter to plus 27%.
Speaker Change: Cigarette volumes were positive for the fourth consecutive quarter as we grew share in a modestly declining industry with continued growth in markets, where smoke free products on the permitted such as Turkey and India.
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James Bushnell: On an organic basis, combustible net revenues and gross profit grew by plus 3.8 and plus 5.3% respectively.
James Bushnell: While pricing was strong and volume were positive, there was a notably negative geographic mix is quoted due to growth in markets such as Turkey and Egypt, in addition to the technical impact from Indonesia.
Speaker Change: Yeah.
Speaker Change: You have a us talk recently about our multi category strategy for smoke free product as we leverage the strengths of the Iqos brand and commercial infrastructure in international market.
James Bushnell: We expect both pricing and negative geographic mix to moderate over the rest of the year and target combustible gross margin expansion organically and in dollar terms
Speaker Change: To accelerate incremental growth from Zain NV.
Speaker Change: This is evidenced by our strong smoke free portfolio reserve in Q1 with visible accretion across region and market.
James Bushnell: As expected, input cost Edwin's yield compared to recent years and based on current assumption we expect this to further improve in 2026.
Speaker Change: We have 46 market with multiple smoke free offering.
Taking a close look at our volumes
Speaker Change: <unk> 16, with all three PMI categories on Ofer.
James Bushnell: Shipman Gross of PLA 3.9% was primarily driven by our smoke-free business
Speaker Change: The execution of the three pronged strategy is generating positive results in markets, such as the Czech Republic, Romania, Switzerland, and our global travel retail business. In addition to promising starts in the U K and Italy.
James Bushnell: with all categories contributing positively and placing us on track for a fifth consecutive year of total volume growth.
James Bushnell: Smoke 3 volumes, grew by plus 14.4%, above our fully-attached range of plus 12% to plus 14%. Reflecting Very positive contribution from ICOs, Zinn, and Viz.
Speaker Change: It is also helping to bolster our position as the global Smokefree champion.
Speaker Change: Double digit Q1 organic net revenue growth was again driven by all three key element of our structural growth model, namely volumes.
James Bushnell: In addition to the growth of these three brands, which I covered earlier, I would also note that our old smoke-free business included US moist snuff and Scandinavian snooze which declined modestly in the quarter.
Speaker Change: Rising and smoked premix.
Speaker Change: Pricing contributed plus six points, reflecting over plus 8% combustible pricing and around 3% for smokefree excluding devices.
James Bushnell: Despite this, all old smoke free production and growth accelerated versus the Priya quarter to plus 27%.
Speaker Change: The positive mix impact of the shift to smoke free products, including U S move premix drove a further positive contribution of press three one points.
James Bushnell: cigarette volumes were positive for the fourth consecutive quarter, as we grew share in modestly declining industry, with continued growth in markets where smoke free products are permitted, such as Turkey and India.
Speaker Change: Overall convertible geographic mix and other factors.
Speaker Change: And unfavorable impact of two seven points.
Thank you for watching!
Speaker Change: This was more negative than in prior quarters, reflecting the technical Indonesia impact and convertible market mix dynamics I explained earlier.
James Bushnell: You have heard us talk recently about our multi-categories strategy for smoke-free product as we leverage on the strengths of the ICO's brand and commercial infrastructure in the national market to accelerate incremental growth from zine and vive.
Speaker Change: Currency had a negative impact of three nine points with a further 0.5 points from acquisition divestiture, which include the divest ment of Victoria.
James Bushnell: This is evidenced by our strong smoke-reportal results in Q1 with visible accretion across
Speaker Change: Turning now to gross margin, we delivered very strong expansion of 340 basis points.
James Bushnell: We have 46 markets with multiple small pre-offering, including 16 with all three PMI categories on
Speaker Change: On inorganic basis, and plus 360 basis points, including currency acquisitions and divestitures.
James Bushnell: The execution of this three-pronged strategy is generating positive results in markets such as the Czech Republic, Romania, Switzerland, and our global travel retail business in addition to promising stocks in the UK and Italy.
Speaker Change: This comprised plus 180 basis points from pricing more than offsetting an 80 basis point unfavorable impact from cost inflation net of productivity and other cost items.
Speaker Change: Smoke free growth delivered an excellent plus 230 basis points with a flat contribution from combustible, excluding pricing, but including the Indonesia impact.
James Bushnell: It is also helping to bolster our position as a global small free champion.
. . . . . .
James Bushnell: WGQ1 organic net-driven growth was, again, driven by all three key elements of our structural growth model, namely volumes, pricing and smoke-fremix.
Speaker Change: This excellent gross margin performance supported a strong adjusted operating income margin expansion of 250 basis points or plus 200 basis points organically after accounting for the currency mix of our cost the divestiture of Victoria and others cope effects.
James Bushnell: Pricing contributed plus six points, reflecting over plus 8% combustible pricing, and around plus 3% for smoke-free, excluding devices.
Speaker Change: This impressive margin expansion was delivered despite a 140 basis point impact of higher SG&A costs, driven by continued investment in our smokefree growth, including U S investment low cost comparison in the prior year and the impact of 2025.
James Bushnell: The positive-mix impact of the shift to smoke-free products, including US smoke-free mix, drove a further positive contribution of plus 3.1.0 [inaudible]
James Bushnell: Overall, combustible geographic mix and other factors add an unfavorable impact of 2.7 points.
Speaker Change: <unk> investment phasing.
James Bushnell: This was more negative than in Priya Quarters, reflecting the technical Indonesia impact and incompressible market-mixed dynamics I explained earlier.
Speaker Change: As we continue to invest in top line growth, we target organic SG&A growth broadly in line with net revenue growth for the year.
Speaker Change: Okay.
James Bushnell: Currency had a negative impact of 3.9 points with the further 0.5 points from acquisition and divestiture which include the divestment of sectoral.
Speaker Change: We continue to drive manufacturing and back office efficiency and delivered over $180 million in gross cost savings in Q1 across both cost of goods sold and SG&A.
[inaudible]
James Bushnell: Turning now to Gross Margin, we delivered very strong expansion of 340 basis points on an organic basis and plus 360 basis points including currency acquisition and divestitures.
Speaker Change: After more than $750 million of savings in 2024. This places us nicely on track to achieve our 2 billion. There are target over 2020 for 2026.
James Bushnell: This comprise plus 180 basis points from pricing, more than offsetting an 80 basis point unfavorable impact from cost inflation, net of productivity and other cost items.
Speaker Change: Focusing now on our Iqos business.
Speaker Change: As expected calendar effects in EU flavor ban and utilization impacted Q1, adjusted IMS. However, the delivery of plus nine 4% growth. Despite these factors <unk>.
James Bushnell: Small pre-growth delivered an excellent plus 230 basis point with a flat contribution from combustible with excellent pricing, but including the Indonesia impact.
Speaker Change: <unk> continued strong underlying momentum.
Speaker Change: We expect double digit progress in the balance of the year in line with our target of plus 10 to plus 12% growth.
James Bushnell: This excellent gross margin performance, supported strong adjusted operating con margin expansion of 250 bedis points, or plus 200 bedis points organically after accounting for the current dynamics of our cost, the divestiture of victura, and others called effects
Speaker Change: Supporting this our commercial initiatives around brand building and continuous innovation on devices and consumables.
Speaker Change: As we progressively rollout illumina, I and new consumable volumes of Syria, Lithia and Dahlia.
Speaker Change: Over the longer term, we have a rich iqos innovation pipeline to further enhance the breadth and quality of the user experience with the iconic brand.
James Bushnell: This impressive margin expansion was delivered despite a 140 basis point impact of higher S.G.N.A. cost driven by continued investment in our small pre-growth, including U.S. investments, a low cost comparison in the prior year and the impact of 2025 investment savings.
Speaker Change: As disclosed in our latest integrated report.
Speaker Change: Over 99% of our 2024 adjusted R&D spend was on smoke free products consistent with the last four years as we continue to drive consumer centered product development.
James Bushnell: As we continue to invest in top-line growth, we target organic SG&E growth broadly in line with network in the growth for the year.
Speaker Change: Turning to Europe, where we are building on the strengths of our Iqos business to create an integrated multi category portfolio to accelerate consumers switching and value creation.
James Bushnell: We continue to drive manufacturing and back-office efficiency and delivered over $180 million in gross cost savings in Q1 across both cost of goods sold and SG&A.
Speaker Change: Total shipments of our flagship smoke free brand advanced by plus 17, 5% in Q1 with an increasing contribution from both <unk> and <unk>.
James Bushnell: After more than $750 million of savings in 2024, this places us nicely on track to achieve our $2 billion target of the 2024-2026.
Speaker Change: Iqos <unk> shipments grew more than 15%, including a positive comparison impact from the prior year.
. . . .
Focusing now on our ICOs business.
Speaker Change: Our investment in brand building initiatives are exemplified by the recent partnership with renewed Italian designer Solecki at Milan design week as part of the Iqos curious ex campaign.
James Bushnell: As expected, calendar effects and EU flavour ban annualization impacted Q1-adjusted IMS, however, the delivery of plus 9.4% growth despite these factors marks continued strong and the lying momentum
Speaker Change: For Iqos Q1, <unk> adjusted IMS.
James Bushnell: We expect double digit progress in the balance of the year in line with our target of plus 10 to plus 12 percent growth
Speaker Change: Grew by plus seven 4% as we further accelerated our share of cigarettes and etch to use to a record 11, 4%.
James Bushnell: Supporting these are commercial initiatives around brand building and continuous innovation on devices and consumables as we progressively roll out Illuma Eye and new consumable variants of Terria, Livia, and Delia.
Speaker Change: Many markets in the region grew adjusted <unk> by double digits, including itunes growth or more in Spain, Germany, Bulgaria and Greece.
Speaker Change: This didn't Amazon more than compensated for a band and utilization that's like.
James Bushnell: Over the long term, we have a rich icosinnovation pipeline to further enhance the breadth and quality of the user experience with the iconic brand.
Speaker Change: Last quarter was especially pronounced one and most notably in Italy.
Thank you.
as disclosed in our latest integrated report.
Speaker Change: I am particularly.
Speaker Change: For the second quarter market share.
James Bushnell: Over 99% of our 2024 adjusted R&D spend was on smoke free product consistent with the last four years as we continue to drive consumer center product development.
Speaker Change: Hum.
Speaker Change: Well the record I of.
Speaker Change: 4% four one in Portland.
Speaker Change: In the quarter.
Speaker Change: Overall Q1 growth was in line with our expectation.
She is the most beautiful woman in the world. She is the most beautiful woman in the world.
James Bushnell: Turning to Europe , where we are building on the strengths of our ICOs business to create an integrated, multi-category portfolio to accelerate consumer switching and value creation.
Speaker Change: And we expect another robust quarter in Q2, followed by our next generation.
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James Bushnell: Total shipments of our flagship smoke free brand, advanced by plus 17.5% into 1, with an increasing contribution from both Zine and Veer.
Speaker Change: The broadly consistent.
Speaker Change: Recovery across market.
Speaker Change: In implementation.
Speaker Change: We continue to expect.
Speaker Change: One 1 billion unit.
James Bushnell: ICO's H.T.U. shipments grew more than 15% including a positive comparison impact from the Priya
Speaker Change: By primary.
Speaker Change: It's been we've only Hungary and Slovakia.
Speaker Change: The band for Claude.
James Bushnell: Our investment in brand building initiatives are exemplified by the recent partnership with Renaud Italian designer Celeti at Milan Design Week as part of the ICO's Curious X campaign.
Speaker Change: More notable mainland market.
Speaker Change: Alan.
Speaker Change: The future that will be early.
Speaker Change: We also continue to rollout new.
Speaker Change: Volume of our tobacco.
James Bushnell: for ICOs, Q1HTU-adjusted IMS, grew by plus 7.4%, as we further accelerated our share of cigarettes and HTUs to a record 11.4%.
Speaker Change: Yeah.
Speaker Change: This is driving coming through with them.
Speaker Change: Is that what you stated, but thanks Gary.
Speaker Change: Yeah.
Speaker Change: Sure Mike.
Speaker Change: Let.
Speaker Change: We know from them.
[inaudible]
James Bushnell: Many markets in the region grew adjusted IMS by double digits, including I think growth or more in Spain, Germany, Bulgaria and Greece.
Speaker Change: Our chemical.
Speaker Change: The region is highlighted by the consistent growth.
Speaker Change: Yeah.
Speaker Change: Yes.
Speaker Change: We'll include and Gary will share with almost 40%.
James Bushnell: This dynamism, more than compensated for pleasodine analyzation, which has flagged the spotter, which is especially pronounced in C1 and most notably in Eton.
Speaker Change: Over a full point on yield and throughput.
Speaker Change: All of the coal market.
James Bushnell: I am particularly pleased to report that Sikon-Korn-Market-Carry-Meet is standing well in the record eye of 82 from 4% to 1% and probably increases to the quarter [inaudible]
Speaker Change: As in Europe.
Speaker Change: The 10%.
Speaker Change: Mark.
Speaker Change: The bulk 30%.
Speaker Change: Notable rollout across the region with London, you know Youre right.
James Bushnell: Overall, regional Q1 adjusted AMS growth was in line with our expectation and we expect another robust quarter in Q2 followed by a next acceleration in the system out.
Speaker Change: On ethane.
Speaker Change: The regulatory landscape is an important determinant of more free program.
Speaker Change: And we are encouraged by recent.
Speaker Change: And remember of market.
Speaker Change: We recognize the role of tobacco harm reduction.
James Bushnell: Our experience of the creative dining class remains unchanged with the boldly consistent pattern of recovery of cost-market
Speaker Change: Maybe.
Speaker Change: This includes green.
Speaker Change: And could you didn't get administration.
Speaker Change: Supporting this claim.
Speaker Change: Got it.
James Bushnell: We continue to expect an impact of her own 1 billion units in 2025, primary due to annualization of the Hungarian and Soviet Union, implementing the ban to fall this year.
Speaker Change: And Hungary, where practical and science based communications to consumer on Mercury product.
Speaker Change: Product.
Speaker Change: Now that's it.
Speaker Change: Advertising Bancorp.
Speaker Change: In Ukraine.
James Bushnell: The most notable many markets in Poland, where the Finchers Dead will be in early 2016.
Speaker Change: I think this answer on it.
Speaker Change: Alright.
Speaker Change: We introduced Halloween.
Speaker Change: Equally.
[inaudible]
Speaker Change: In Japan, we in Denver.
James Bushnell: We also continue to roll out new and true variants of our two-backed hopefully consumable Libya, which is driving from its new measures.
Speaker Change: You had just said I am a growth of plus nine 2%.
Speaker Change: Marking the 10th quarter of double digit growth.
Speaker Change: This is well-illustrated by Sangarin, Bolivia with a double-digit share of semi-experienced, less than three months from long.
Speaker Change: Yes.
Speaker Change: Adjusted share increased by three percentage points year on year.
Speaker Change: One six points sequentially.
[inaudible]
Speaker Change: Our commitment to progress in the region is highlighted by the confusion goes to the security of the fair.
Speaker Change: 2%.
Speaker Change: Leather lighten the dynamism of the innovation of universities iconic brand and product portfolio.
Speaker Change: This also includes Hungarian, where Budapest Fair is almost 42%, over 4.5 years and 2.5.
Speaker Change: Market.
Speaker Change: I could use captured more than three quarters of the figures.
Speaker Change: One and combined with our business.
Speaker Change: impressively 24 of the 34 markets where I could present in Europe .
Speaker Change: The mine is now the market leader by volume.
Speaker Change: With approximately 75%.
Speaker Change:
He's kicked the book 30 percent.
Speaker Change: The overall more Cree category continued progress.
Speaker Change: Notable fallout across the region into London, Vienna, Zurich, Lisbon, and Athens
Speaker Change: Reaching almost 8% on an ethanol of the baby.
Speaker Change: Mark.
Speaker Change: The regulatory law state is an important determinant of most people's rights and we are encouraged by recent produces development in a member of markets which recognize the role of tobacco harm
Speaker Change: Yes.
Speaker Change: <unk> predictor.
Speaker Change: Now.
Speaker Change: The system performed before.
Speaker Change: Globally.
Speaker Change: <unk> seen very strong Iqos a woman.
Speaker Change: As illustrated by <unk>.
Speaker Change: This seems to be doing. We should use dedicated registrations because it's time-to-day flame of no preparer.
Speaker Change: Yes.
Speaker Change: I lied.
Speaker Change: The year on year growth in the people of Indonesia.
Speaker Change: Cool.
Speaker Change: and Hungary, where factual and science-based communication to consumers on mostly products is allowed, versus the total advertising done for from yesterday.
Speaker Change: Sure.
Speaker Change: Robert progress in the Middle East and North Africa.
Speaker Change: Loan growth in Belgrade, 17, 7% there.
Speaker Change: <unk> increased.
Speaker Change: to Ukraine. And it's like that we come to an HPE where the cigarette was introduced following
Speaker Change: Yeah.
Speaker Change: I could.
Speaker Change: In South Korea is a 14, 1%.
Speaker Change: Good.
Thank you very much.
Wanted by the law.
Speaker Change: I you know heightened.
In Japan, we deliver XQ-adjusted IML growth of plus 9.2 percent.
Speaker Change: Market.
Speaker Change: Perfect.
Speaker Change: Aero continues.
Speaker Change: But.
Speaker Change: 60 years masking the tenth quarter of W. Rose Haster Accounting for the Least Year.
Speaker Change: The growth of the public market competitors.
Speaker Change: Yes.
Speaker Change: Although I liked.
Speaker Change: HPU adjusted share increased by 3.0% year-on-year, and plus 1.6 points sequentially to reach 32.2%, further highlighting the dynamism of the innovative high-cost brand and product portfolio in this new market.
Speaker Change: The excellent growth of our global.
Speaker Change: Net.
Speaker Change: <unk> is a leading space or our move to category offering.
Speaker Change: You'll recall that if you will.
Across all regions and the chair of over.
Speaker Change: And therefore.
Speaker Change: Okay.
Speaker Change: I coach XQU's captured more than three quarters of 7.0.2.1 and combined with our cigarette business, [inaudible]
Speaker Change: In the U S land.
Speaker Change: Plan, we commenced director of Iqos device third and ex U.
Speaker Change: At the end of March.
Speaker Change: Following targeted engagement with regulators and consumers over recent months.
Speaker Change: While intentionally more scale, we have written more than threats with other iqos pilot plan in the coming months as we prepare for the launch of Iqos anymore.
She is the most beautiful woman in the world.
The overall small free category continues to progress.
reaching almost 48% on a national offset basis in March.
As a reminder, we are not.
Speaker Change: with 13 cities and 8 prefectures now crossing the 50% threshold.
Speaker Change: And again, if you will.
Speaker Change: From the U S and our could you call.
Speaker Change: Giorgolini, we continue to see very strong icons of women, as illustrated by CCC of HR.
Switching to <unk>, which continues to resonate strongly with other users.
Speaker Change: I like including 15 year-on-year growth in the typical of Indonesia and Mexico, to show class high-tech and share.
Speaker Change: Therefore, the premium brand equity and deliver excellent visit.
Speaker Change: Continued strong demand and increased production capex.
Speaker Change: Robbers were raised in the Middle East and North Africa, and some growth in the late 17th and 17th
Speaker Change: Enabled shipment volume growth.
Speaker Change: 3%.
Speaker Change: Over 200 million tons for the quarter.
Speaker Change: This 70 million year on year increase is increasing.
Speaker Change: I coached with a new eye in South Korea, with 14.1% share in sales, supported by the loss of in your eye in your highly competitive market.
Speaker Change: No. We should note the prior year first quarter feature multiple depletion of retailer and distributor level and therefore, the sell out volume higher than men.
Speaker Change: Profectia Performance in Hero, continues to be obviously impacted by the growth of the combustible market, where it composes the drive as normal lines.
Speaker Change: Turning to the beginning.
Speaker Change: As we continue to expand production at our Owensboro plan.
Speaker Change: Also, what I like to do is the excellent growth of our global travel experience, which is a leading space for our multi-tategory offering.
Speaker Change: We accelerated one quarter.
Speaker Change: There you go.
Speaker Change: A couple of months.
Speaker Change: This enabled increased shipment at quarter end.
Speaker Change: We recorded some examples across all regions, in the chair of over 18% in Apple's ICO to present.
Speaker Change: The pull forward of Finnish distributor.
Speaker Change: With very limited growth two of these additional shipments within the quarter. This did not yet have a meaningful impact on Florida.
Speaker Change: In the U.S. Act plan, we comment direct sales of ICOC devices and HPUs in OC texture at the end of March.
Speaker Change: We target who is normalization of the supply situation.
Speaker Change: Q3 this year.
Following targeted engagement with legal administration consumers over recent months
<unk> continued to perform very robustly at retail given the circumstances.
Speaker Change: While intentionally small scale, we have received more interest with further ICOC pilot plans in the coming months, as we prepare for the at the launch of ICOC Lima.
Speaker Change: Strong double digit growth.
Speaker Change: According to maintain one of the good you grew by around 16% year on year.
Speaker Change: As a reminder, we are not assuming any significant HPV volume from the US, but we are working with your
Speaker Change: You can't remain strong at over 70% despite competitor discounting.
Speaker Change: Why is that.
Speaker Change: These days.
I'm sorry, I'm sorry, I'm sorry, I'm sorry, I'm sorry
Speaker Change: The more simple goal.
Speaker Change: Coaching to Zinda, which continues to resonate strongly with adult nicotine users as a today-of-product
Speaker Change: <unk> shows our coding says.
Speaker Change: And backed by Israeli bin.
Speaker Change: And one by one.
Speaker Change: Sequentially.
Speaker Change: One 5%.
Speaker Change: We already have our share on MSA data, which measures shipment from distributor to retail.
Speaker Change: continued to demand an increased production capacity, enabled shipment volume growth of the 63% to reach over 200 million pounds for the quarter.
Speaker Change: Covered almost.
Speaker Change: And not on <unk>.
Gross who I just mentioned.
This plus 70 million zero on your increase is impressive [inaudible]
Speaker Change: We thank all of you affect growing at around.
Speaker Change: Though we should note the prior efforts of quarter of each unnotable situation of retail and distributed stock levels and therefore a stellar volume higher than cheap men and this quarter during either the beginning or third punishment.
Speaker Change: 55%.
Speaker Change: <unk> is the leading brand looked like win win.
Speaker Change: Xena effect gradually accelerate in the coming months.
Speaker Change: Our availability improved and we reactivate commercial and marketing.
Speaker Change: As we continue to expand production at our overall plan, we accelerated one plan step in this process to the later part of March.
Speaker Change: We remain excited about the growth prospect of this dynamic category.
Speaker Change: Its potential.
Speaker Change: This enabled increased treatment at quarter-hand, but a good forward of initial risk to be carried so soon.
Speaker Change: Consumers from cigarettes.
Speaker Change: But the small comp of tobacco.
Speaker Change: <unk> remains the only nicotine pouch authorized by the SBA.
Speaker Change: We are very limited close to this additional shipment to retail in the quarter. This will not yet have a
Speaker Change: Include those volumes in both three and six milligram strength.
Speaker Change: And commercialized in the U S.
Speaker Change: We target full normalization of the supply situation in 2003 this year.
Speaker Change: I would like.
Speaker Change: There is a large addressable market in the millions of Google at Newport News in the U S and.
and many more. Thank you. Thank you.
Speaker Change: They can continue to perform very robustly at retail, even the second themselves, with strong double-edged octet growth. According to Smith's sense, one of the volume grew by around 15% here on the Saturday that you share with me on the phone at over 70%, despite a few competitive
Speaker Change: And we plan to and get more activity beyond our existing customer base.
Speaker Change: Legal aid.
Speaker Change: You bet.
Speaker Change: Indeed.
Speaker Change: Tony let them.
Speaker Change: Demand and capacity expansion ahead of target.
Raymond: Now Raymond our shipment forecast eight months' worth right around $14 million down for the year.
Speaker Change: While Nichkin data is based on only a small sample of gold, it also shows a lot of technology shares as being laid back by usability and is planned by 1.445.2 countries.
With the outstanding network of our team on the ground, we continue to work on increasing capacity in our Kentucky facility.
Raymond: On September for a second U S manufacturing site in Colorado is well underway with products in development.
to 61.5 percent.
Speaker Change: We already observed our share on MSData, which measures treatment from distributors to retail, recovered to almost 56% in large, on the limited cross-through I just mentioned.
Raymond: Early 'twenty.
Raymond: We remain.
Raymond: In terms of the U S.
Raymond: Committed to investing in with any sector.
Raymond: The substantial investments we have made in the U S. I continue.
Speaker Change: with category of sex growing at around 30% to 35% while the leading brand is Supply Constraint, who expects green of sex to gradually accelerate in the coming month, as install availability into and we reactivate commercial and marketing initiatives.
Raymond: Continued wisdom and significant job creation and economic contribution to the country.
Outside the U S. Now we continue to rollout new.
Raymond: Leveraging our presence in <unk>.
Raymond: And do we drive awareness.
Raymond: Awareness and trial with Google It.
Raymond: Right.
Raymond: The total international nicotine pouch category is Nathan.
Speaker Change: The remain excited about the growth of sex of the dynamic category and its potential to regulate, continue from cigarettes, from other traditional forms of tobacco.
Raymond: All geography, and then alone.
Raymond: The size of the.
Raymond: Right.
Raymond: Okay.
Speaker Change: Wynne remains the only new cutting-out product authorized by the LDA and this includes all variants in both three and six milligrams length currently commercialized in D.A.
Raymond: We are now.
Raymond: Yes, eight market.
Raymond: Globally, following Q1 launches UAE and Columbia.
Raymond: All addressable market is.
Raymond: Meaningful opportunities given the unique.
Speaker Change: As I would like a tag name, there is a large addressable market in the millions of legal years in New York, and we plan to get more actively beyond our existing consumer day to other legal
Raymond: Of the 50 days.
Raymond: We can do it.
Raymond: 3% growth of our international footprint.
Raymond: <unk>.
Raymond: Almost doubled outside of the Nordics.
Raymond: The leasing momentum in European market.
Speaker Change: Indeed, the strong latent demand and capacity expansion ahead of target, we now range our achievement target to 800, to 800, and cost a million pounds for the year.
Raymond: Yeah.
Raymond: And the U K, where we comment and ethanol.
Raymond: Rollout.
Raymond: In emerging market.
Raymond: Strong progress continues in Pakistan, Mexico, and South Africa.
Thank you for watching!
Speaker Change: With the outstanding effort of our team on the ground, we continue to work on increasing capacity in our scientific facility.
Speaker Change: Yeah, My global cover weekends and notable standout as it also increases global visibility and awareness of new within our multi category.
Speaker Change: Construction of our second U.S. once again site in Colorado is well in the way with political development in early 2026.
Speaker Change: Finally.
Speaker Change: Our Mercury performance.
Speaker Change: Got it.
Speaker Change: These plays an increasingly important role within our category universe.
We remain as we have been intense until the U.S.
Committee for Investing in your Administration
Speaker Change: He is growing volume and gross margin.
Speaker Change: The potential investments we have made in the U.S. are expected to continue to result in significant job creation and a community to be seen to the concert.
Speaker Change: Shipment volume doubled year on year.
Speaker Change: On an equivalent unit basis.
Speaker Change: Driven by very good performance in Europe, whereas the Piedmont.
Speaker Change: Slowly.
[inaudible]
Speaker Change: Lastly, at the expense of disposables, even improve band and we're seeking format.
Speaker Change: I will start the US now. We continue to roll out the leveraging of our presence with high-cost and G.E. to drive awareness and trial with G.E. G.E.
Speaker Change: They are increasingly one adoption rate.
Speaker Change: Abandonment across the market, which is testament to the quality and presentation.
Speaker Change: The total international nicotine cost that you're doing is nation, you're almost over here and same at the wrong house, the size of the US is only here.
Speaker Change: And so that would be great.
Speaker Change: Yeah.
Speaker Change: Don't know convertible.
Speaker Change: Our business performed in Q1 with organic net revenue growth of the <unk>.
Speaker Change: We are now in just the eighth market globally, following two volunteers to the UAE and Columbia, and we'll see it with all the addressable market as many cool opportunities given to be mentioned to each of the day.
Speaker Change: 8%.
That's 7%, excluding Indonesia is equal impact.
Speaker Change: This was driven by strong pricing of eight 2%.
Speaker Change: Notable contributions from Turkey, Poland and Germany.
Speaker Change: These less favorable timing dynamic.
We continue to expect full year convertible.
Speaker Change: Looks like we are.
Speaker Change: The slides.
Speaker Change: including commission momentum in your plane market because of Priya, Gizelle and Gigi K, where we comment the national outcomes roll out.
Speaker Change: Yes.
Speaker Change: Alright.
Speaker Change: Nine by one 2% one due to growth in progress, whereas most of the products and make them or not present more than offset by accelerated decline.
Speaker Change: In emerging markets, strong progress continues in Pakistan, Mexico, and South Africa.
Speaker Change: Yeah.
Speaker Change: He and my global television, the Notables??, has its awesome features, global visibility, and awareness of them, using our multiplicity of your films.
Speaker Change: Where is it.
Speaker Change: Yeah.
Speaker Change: <unk> in Turkey or India.
Speaker Change: These divergent.
Speaker Change: <unk> reported in some cases by demographic trend.
I'm sorry, I'm sorry, I'm sorry, I'm sorry, I'm sorry
Speaker Change: Nonetheless.
Speaker Change: Okay.
Finally, closing our smoke-free performance with e-vapor.
Speaker Change: I know you guys did that decline for the year.
Speaker Change: This played an increasingly important role within our multi-patterary dinner with growing volumes and growth margins.
Speaker Change: Category share was going to be open for one.
Speaker Change: Digital marketing.
Speaker Change: Marlboro and our global brand portfolio.
Speaker Change: treatment volume, double-zero net, 0.6 billion on an equivalent unit baby.
Speaker Change: All time first quarter high.
Speaker Change: We continue to target broadly stable category share over time.
Speaker Change: Even by very good performance in Europe , where the participants continue to be fully, possibly at the extent of this horrible event, even in food ban and restriction for the format.
Speaker Change: Our main priority being maximizing button.
Speaker Change: What is the growth.
Speaker Change: Paul.
Speaker Change: Most importantly.
Speaker Change: The observed increasing Z1 adoption rate and low abandonment across the market, which is testament to the policy and position of this senior product to be the right species.
Speaker Change: Organic growth.
Speaker Change: We grew robustly.
Speaker Change: Right.
Speaker Change: Following the recovery.
Speaker Change: Paul.
[inaudible]
Speaker Change: This is Greg.
Speaker Change: Our outlook for 2000.
Ramon Sino, Convustible
Hi.
Speaker Change: Our business performed robustly in Q1 with organic net revenue growth of plus 3.8% or closer to plus 7% excluding the Indonesia technical impact.
Speaker Change: We delivered a very strong third quarter.
Speaker Change: Better than expected Martin.
Speaker Change: And we remain confident we will achieve another year.
The turbo.
Speaker Change: As such we are reconfirming, the currency neutral growth outlook we.
Speaker Change: Provided in February.
Speaker Change: Might that drop or increase in the.
Speaker Change: He is a less durable tiny dynamic in H.E. We continue to expect to hear a [inaudible]
Speaker Change: Global macroeconomic environment.
Speaker Change: As a global company with broadly diversified.
Speaker Change: Yes.
Speaker Change: Worldwide network, including MSW, where things have been day.
Speaker Change: The cigarette in the street, designed by 1.3% into 1, due to growth in geography where smoke-reproduced donations or not present more than a step by accelerated clear design and care.
Speaker Change: We believe we are well positioned to mitigate the impact of Brexit incentive.
Speaker Change: While this increasingly volatile we do not currently anticipate.
The net impact on our business.
Speaker Change: where SFCs are not terminated as in 30 or India to expect these divergences to continue to occur in some cases by demographic trends. Nonetheless, the truth is, it will expect a low
Speaker Change: Recently introduced.
Speaker Change: Yes.
Speaker Change: We expect the continuation of momentum from our luxury business.
Speaker Change: Well, if you're doing the benefit of further muesli category deployment.
Speaker Change: As I explained we are raising our forecast for use in shipment rate right around 40 million tons.
[inaudible]
Speaker Change: Let's go and share what's cool, growing 0.4.1.1, finally due to physical marketing.
Speaker Change: This does that support our forecast of the well.
Speaker Change: Both Margueroux and our Global Grant Hospital with both time-cursor eyes.
Speaker Change: 14%.
Speaker Change: Shipment growth, which incorporate engine for growth assumption for Iqos.
Speaker Change: We continue to target both the federal categories of the time. We need our mentor, we need to be maximizing value and supporting the growth of the social program.
Speaker Change: We also continue to expect total in my organic net revenue growth.
Speaker Change: Let's see.
Speaker Change: 8%.
Speaker Change: Most importantly, combustible organic growth protein, continue to grow in robocene at the site on 6% following the recovery of 2024.
Speaker Change: Organic operating income growth of five five.
Speaker Change: 5%.
Speaker Change: Currency neutral adjusted diluted EPS growth.
[inaudible]
Speaker Change: Symptoms like with them.
I'm sorry. I'm sorry. I'm sorry. I'm sorry. I'm sorry.
This brings to our outlook for the 2020 time.
Speaker Change: And pricing.
Speaker Change: As announced in this mornings press release.
Speaker Change: He delivered a very strong cross-order, including better than expected modern, and we remain confident to get at least another year of Cicero Ball.
Speaker Change: We are raising our 2025.
Speaker Change: Adjusted diluted EPS forecast.
Speaker Change: Kevin.
Speaker Change: Isn't there a 49.
Speaker Change: Now reflect well.
Speaker Change: As such, we are reconcerning the 30-minute-a-go outlook provided in February despite that drop of increase in circumstances in the global network in English and German.
Speaker Change: 14% growth.
Speaker Change: Got it all down.
Speaker Change: We do the February board accumulative impact of symptoms.
Speaker Change: The value.
Speaker Change: Right.
Speaker Change: As a global company, we've boldly diversified the adoption of the worldwide security on the Earth, including any type of experience in the present day. We believe we are well-positioned to get what I'm supposed to buy in time.
Speaker Change: This reflects recent strength.
Speaker Change: Japanese yen and Russian ruble, partly offset by lower throughput.
Speaker Change: Yes.
Speaker Change: You assume SBU shipment volume.
I'm sorry, I'm sorry, I'm sorry, I'm sorry, I'm sorry
Speaker Change: You are the situation in volatile. You do not turn to you on to to date a metanym impact on our business from
Speaker Change: Kevin Kline.
Speaker Change: And one 5 billion.
Speaker Change: Another quarter of it.
Speaker Change: Adjusted <unk> growth.
Speaker Change: We expect a continuation of some momentum from our smoke-free business, including the benefit of further multi-category development.
Speaker Change: Around 15%.
Speaker Change: For U S. Then we expect shipments to be at the similar level one.
Speaker Change: Slide 13 continue and affect gradually.
Speaker Change: As I explained, we are raising our focus for US instruments. We are going to recommend 14-1-10.
Speaker Change: Yeah.
Speaker Change: We forecast adjusted diluted EPS of $1.
Speaker Change: with further support, our focus of plus 14% FST treatment goals, which incorporate ancient
Speaker Change: One.
Speaker Change: Bye.
Speaker Change: Severable.
Speaker Change: <unk>.
Speaker Change: Dan.
Speaker Change: Prevailing rates.
Speaker Change: We expect the slow it's one overall.
Speaker Change: Net revenue growth around the high end of our second rent for the fifth year and organic growth.
Speaker Change: With regard to our balance sheet deleveraging remains a key priority and we continue to target further redemption.
I'm sorry, I'm sorry, I'm sorry, I'm sorry, I'm sorry
Speaker Change: Hi.
Speaker Change: Placing us on track for our target ratio of her own dime.
Doug: Doug one of 2020.
Doug: We believe our growth providing best in class within large cap consumer group as seen by our.
$7.49
Speaker Change: This now reflects the 12th plus 14th percent growth in dollar terms and includes a favorable estimated
Doug: Not yet.
Doug: We are well on track.
Doug: Our it team.
Doug: Adjusted diluted EPS growth build out them as a key priority.
Doug: And as demonstrated in Q.
Speaker Change: which reflects vision strength in the Euro, Japanese Jain, and Russian Liberals, as you have said, by a senior customer.
Doug: Before we are committed to taking important steps to manage potential turnkey volatility including through our <unk>.
and many more. Thank you. Thank you.
What do you see?
Doug: Beyond the delivery of our growth lie enormous court.
Speaker Change: We assume HPU shipment volume of 37.5 to 38.5 billion, with another 1.4ter of HPU-adjusted IMS
Doug: We have made to our business over the last few years.
Doug: And the continued drive towards our ambition to become substantially more crude.
Doug: This quarter coincide with the publication of the Edison.
Speaker Change: For U.S. VIN, we expect shipments to be at a similar level to Q1, as trade with stocking continues and off-tech gradually accelerates.
Doug: Our annual integrated report.
Doug: Which provides a comprehensive view of our company performance across both financial and nonfinancial diluted.
Speaker Change: Vishokha, Adelter Dilleterity S, of $1 A.C. to $1 A.C. Fine, including a favorable current
Doug: Now include important action, we are taking with regard.
Access prevention as well as the progress we have made on our operational efficiency.
Speaker Change: To expect the soon H1 overall, these organic material growth around the high end of our frigate rent for the future and organic co-eyed growth slightly to do.
Doug: Thanks to our resilient.
Doug: <unk> innovation.
Doug: And maybe future proofing our business.
Doug: As explained in the world.
Doug: Our approach.
Doug: Fundamentally.
Speaker Change: With regard to our balance, delivery and remains a temporary fee, and we continue to target further reduction in 225, letting us on track for our target ratio of her own two times by the end of 2026.
Doug:
Doug: With the objective of birth.
Doug: And then to the.
Doug: The growth of our core coupon formation to drive continued value creation.
Doug: I would encourage everyone who has an interest in.
Doug: And why we are performing well.
Thank you for watching!
Speaker Change: We believe our growth profile is best in class, we will not stop continuing as soon as I will see the target target, which we are well on track to meet or to.
Doug: I will now conclude today's presentation with some key messages.
Doug: Following an excellent start to the year, we are now on track for another year of strong performance.
Speaker Change: Adjustability at EPS Road in Zolaotem, in the security and as demonstrated in 2024, we are committed to taking forward to steps to manage the potential turn to volatility, including to our
Doug: 2012.
Doug: While no company.
Doug: To macroeconomic volatility we believe we are well positioned to navigate external diamond.
We have two powerful growth drivers pricing power and push it needs more Cree category.
Speaker Change: Behind the delivery of our growth lies the enormous effort we have made to perform our business over the last year and the continued drive towards our ambition to become a century more clean.
Doug: Our volume growth.
Doug: We target our fifth consecutive year of expansion led by Iqos.
Doug: Indeed.
As we continue to invest strongly behind our smoke rebrand.
Doug: These drivers are all right.
Speaker Change: This quarter coincides with the publication of the 6th edition of our annual Integrated Resource, which provides a comprehensive view of our company's performance across both financial and non-financial dimensions.
Doug: And combined with our quite measure on pricing on cost we have great confidence in foreseeable adjusted diluted EPS growth in both.
Doug: Currency neutral and that often.
Doug: Finally, we remain a heightened designated business.
Speaker Change: I like to include the important efforts and action we are taking with regard to youth access prevention, as well as the progress we have made on our operational efficiency.
Doug: And unwavering commitment to a progressive dividend.
Doug: The new cohort further rewarding our shareholders.
Doug: Our transformation there is a system.
Thanks a new hour with William, driving innovation, and ultimately, future proofing our disease.
Doug: Thank you and we are now very happy to answer your system.
Doug: Thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again and please standby, while we compile our Q&A roster.
Speaker Change: I'm playing in the resort. Our approach to sustainability is fundamentally business-reason, with the objective of both destiny and an answer to the growth of our social transformation to drive continued value creation.
Bonnie Herzog: And our first question comes from Bonnie Herzog of Goldman Sachs. Your line is open.
Speaker Change: I wouldn't create everyone is an interesting hour and why we are conforming to it [inaudible]
Right. Thank you, hi, Emmanuel and everyone I, Adam Hi, I had a few questions on San could you maybe give us some more color on the out of stock issues, you might still be experiencing in the U S. I know you touched on this but I'm just curious how long you think it will take for retailers to rebuild their inventories.
I will now conclude to this presentation with some key methods.
[inaudible]
Speaker Change: Following an excellent start of the year, we are now on track for another year of strong performance in 2025.
Speaker Change: While no company is immune to macroeconomic inequality, we believe we are all positioned to navigate external dynamics.
Bonnie Herzog: And I know you raised your shipment guidance for them for the year, but.
Bonnie Herzog: It does still imply that growth will decelerate year over year to around I think 35% for the rest of their this is at the low end of your range versus I guess, the 53% you reported this quarter. So just hoping you could talk through the thinking.
Speaker Change: We have three powerful growth drivers with striking power and positive smoke-free category on top of volume growth, where we target our shift consecutive year of extension led by icos, zim and zim
Bonnie Herzog: Behind this may be just a phasing.
Bonnie Herzog: Yeah.
as we put it in the totally behind our smokey blend.
Bonnie Herzog: Sure happy to do that so of course, we are facing a particular year in 2025 with zain in the U S. Because he's going to be a mix of continuation of strong growth and strong consumer of the growth of course, when you look at the shipment be careful and I flagged that in my.
Speaker Change: These drivers are also profit-effective and combined with our positive measures on pricing on cost.
Speaker Change: We have great confidence in sustainable adjustability, CCS growth in both current vehicles and
Speaker Change: Finally, we will remain a highly conservative business with an unwavering commitment to our
Bonnie Herzog: Our remarks, because last year, we are clearly consumer offtake in Q1, which was much much stronger than our shipment that was the time when the consumer started to empty. The shelves. So we need to be cautious when we look look at the shipment is they are now reflecting the consumer offtake.
Speaker Change: We look forward to further rewarding our shareholders as our confirmation Davies are especially very strong.
Speaker Change: Thank you, and we are now very happy to answer your questions.
Bonnie Herzog: And and take that into into account and next to the strong growth that we expect from consumer offtake and we have a very dynamic categories, 30% to 35% growth. Despite the fact that the leader Zane was constrained we're gonna add on top of that this replenishment is restocking.
Speaker Change: Thank you. As a reminder to ask a question, please press Star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press Star 1-1 again and please stand by while we compile our Q&A roster.
Speaker Change: And our first question comes from Bonnie Herzog of Goldman Sachs, your line is open.
Bonnie Herzog: I'm not going to speculate on exactly what it is but it certainly few tens of millions can and we have started because of this good performance on production that I explained.
All right, thank you. Hi, Emmanuel and everyone.
Speaker Change: I had a few questions on Zen. Could you maybe give us some more color on the autostock issues? You might still be experiencing the US.
Bonnie Herzog: To send more product to first of all wholesalers distributors, and then says they're going to start to ship to retailers. So it's going to be a very gradual process are there are still of course very.
Speaker Change: I know you touched on this but then just curious how long you think it will take for retailers to rebuild their inventories and I know you you know you raised your shipment guides for then for the year but
Bonnie Herzog: I would say material situation of out of stock we're going to continue the replenishment in the second quarter may be part of the third quarter as well and we've been explaining that we explained we are expecting to be back to a normalized situation. If I may say, therefore, no more material out of <unk>.
Speaker Change: It does still imply that growth will decelerate your rear to around I think 35% for the rest of the year. This is at the low end of your range versus I guess the 53% you reported this quarter. So just hoping you could talk through the thinking behind this maybe just the phasing.
Bonnie Herzog: Our situation in the third quarter of 25, so in terms of shipment that's going to be this profile through the year of <unk> and accelerating growth for our shipments that's what we expect.
Thank you
Speaker Change: Sure, Bonnie, happy to do that. So, of course, we are facing a particular year in 2025
Speaker Change: with the US, because it's going to be a mix of continuation of strong growth and from consumer of the growth.
Bonnie Herzog: Which is going to reflect first the consumer uptake that is going to accelerate and then of course, our replenishment impact it is going to decrease as we.
Speaker Change: Of course, when you look at the shipment, be careful and I flag that in my...
Speaker Change: Remarks, because last year we had clearly consumer of taking 2-1.
Bonnie Herzog: Replenishment, if you want so it's a particular profile and the replenishment issue to some extent is going to <unk>. The fact that there is a growth in the consumer offtake that we're going to expense for the year.
Speaker Change: which was much, much stronger than our shipment. That was the time when...
Speaker Change: The consumer started to empty the shelves, so we need to be cautious when we look at the shipment if they are now reflecting the consumer of tech and take that into account.
Bonnie Herzog: Okay. That's helpful. I appreciate it and then just maybe a second question for me on margins you delivered robust margin expansion in the quarter. So how should we think about the drivers of continued margin expansion for the remaining of the year I guess, especially in the context of what you mentioned.
Speaker Change: And next to this strong growth that we expect from consumer of tech, and we have a very dynamic category, 30 to 35,000 growth, despite the fact that the leader Zine was constrained, we're going to add on top of that, this replenishment is restocking.
Bonnie Herzog: As it relates to continued SG&A growth and the investments et cetera.
Speaker Change: I'm not going to speculate on exactly what it is, but it's certainly a few tens of millions can and we have started because of this good performance on production that I explained to send more product to first of all all sellers.
Bonnie Herzog: And then.
Bonnie Herzog: On the back of that you know I know we've talked about this before but how should we also think about the margin gap you're seeing between your combustible business and then smoke free products today and then.
Bonnie Herzog: The key drivers of further expansion of that gap over the next couple of years. Thank you.
Speaker Change: Distributors, and then they're going to start to shift to retail. So it's going to be a very...
Bonnie Herzog: Loopnet.
Gradual Process
Bonnie Herzog: Obviously.
There are still, of course, very...
Speaker Change: We are very pleased with our margin expansion, that's something we are targeting 425.
I would say material situation of out of stock.
We're going to continue the replenishment in the second quarter.
Speaker Change: And we are very positive about our expectation we have a clear illustration in Q1 of the strong performance in term of margin expansion clearly our smoke free products are driving this first and foremost is margin expansion.
Speaker Change: Maybe part of the third quarter as well, and we've been explaining that we are expecting to be back to a normalised situation, if I may say, therefore no more material out of stock situation in the third quarter of 25.
Speaker Change: Have an impressive $6 70 basis points.
Speaker Change: So, in terms of shipment, that's going to be this profile through the year of an accelerating growth for our shipments, that's what we expect.
Speaker Change: <unk> expansion in Q1 for our smoke free business.
Speaker Change: Don't take that as a reference for the full year, but that means that we are now above 70% gross margin rate for the Smokefree business. It's.
Speaker Change: which is going to reflect first the consumer aspect that is going to accelerate.
Speaker Change: And then, of course, replenishment impact that is going to decrease as we fulfill this replenishment, if you want. So, it's a particular profile, and the replenishment, if you want, to some extent, is going to hide the fact that there is a growth in the consumer of tech that we're going to experience through the year.
<unk> five percentage points higher than combustible. So as we are growing of course, very fast our smokefree business faster than convertible.
Speaker Change: That means that we are benefiting at the margin level of a very positive mix evolution and we believe that this difference of 325.
Speaker Change: Okay, that's health, I appreciate it. And then just maybe a second question from me on margins. You delivered, you know, robust margin expansion in the quarter. So how should we think about the drivers of continued margin expansion for the remaining of the year? I guess especially in the context of what you mentioned.
Speaker Change: Should stay between smooth.
Speaker Change: Smoke free and convertible I'm, not saying, it's going to stay exactly the same level, but we're going to keep a very material difference between the two and we're going to continue to benefit.
Speaker Change: From this positive mix effect.
Speaker Change: For the future.
Speaker Change: as it relates to continued S.G.A. growth and the investments, etc.
Speaker Change: A number of drivers that will continue to play on the margin for our smoke free portfolio.
Speaker Change: And then on the back of that, I know we've talked about this before but how should we also think about the margin gap?
Speaker Change: There is of course, the mix coming from <unk> in the U S is the best in class gross profit margins. So when we grew <unk> faster than the U S that has a positive impact you have all the scale impact that we are generating on Iqos and you should look at the last two to three years, you've seen on a very consistent basis, a gradual improvement on the margin.
Speaker Change: You're seeing between your combustible business and then, you know, smoke-free products today and then, you know, possibly key drivers of further expansion of that gap over the next couple of years. Thank you.
Speaker Change: Look, Bonnie, obviously we are very pleased with our margin expansion that's something we are targeting for 25.
Speaker Change: On Iqos issue certainly magnified in the first quarter, because we have less sale of device last year, we had big device sell in Japan as we were launching in <unk>. So that is helping the margin, but fundamentally we are benefiting from scale impact productivity and a better performance from device.
Speaker Change: and we are very positive about our expectation. We have a clear illustration into one of the strong performance in terms of Martin Expansion.
Speaker Change: Clearly, our smoke-free products are here driving this certain form of this margin of expansion. You have an impressive 670 basis point organic expansion in Q1 for our smoke-free business.
Speaker Change: And then we have some pricing that you assume 3% on consumable.
Speaker Change: For our smoke free business. So we are increasing prices as well and last element, which is more marginal today, but we're also improving the margin on <unk>.
Speaker Change: Don't take that as a reference for the full year, but that means that we are now above 70%.
Speaker Change: So that is also asking so as you can see we have many positive driver behind our smoke free business and smoke free business is a driver for of our first driver for margin improvement. Okay. Perfect. Thank you so much I'll pass it on thank you.
Speaker Change: Gross margin rate for the smoke free business. It's 5% point higher than combustible.
Speaker Change: So, as we are growing, of course, very fast our small pre-business and faster than combustible.
Speaker Change: Thank you.
Speaker Change: And our next question comes from Matt Smith of Stifel. Your line is open.
Speaker Change: That means that we are benefiting at the margin level of a very positive mix evolution.
Speaker Change: Hi, Emmanuel Thank you for the question.
Speaker Change: And we believe that the difference through 25 should stay between small free and combustible. I'm not saying it's going to stay exactly at the same level, but we're going to keep a very material difference between the two and we're going to continue to benefit.
Speaker Change: Good morning.
Speaker Change: If we could first talk about the guidance outlook with a strong first quarter and now the second quarter guidance. The first half EPS growth on a constant currency basis is a few points above the high end of the full year outlook can you talk about the factors in the second half that we should take into consideration with the constant currency EPS growth outlook implied vehicle.
from this positive mix effect [inaudible]
Speaker Change: I think for the future there are a number of drivers that will continue to play on the margin for our smoke report for you. There is of course a mix coming from Zine in the US, is the best in class gross profit margin so when we grow Zine fast in the US
Speaker Change: <unk> points below the full year average by my math, just the shape of the year there.
Speaker Change: Yeah.
Sure, Matt happy to take care to take that one.
Speaker Change: So yes, we are saying that we expect to be.
Speaker Change: Well positioned versus the overall bracket for the year in terms of revenue growth, we expect to be a bit above on why.
Speaker Change: Scale Impact that we are generating on ICOs, and if you look at the last two to three years, you've seen on a very consistent basis a gradual improvement on the margin on ICOs. This is certainly magnified in the first quarter.
Speaker Change: No you know that these are the traditional difference.
Speaker Change: You can see during a year between H, one and it's true you may have some comparison basis.
because we have a less cell of divorce like you we had.
Speaker Change: Can play there is.
Speaker Change: Big device sell in Japan as we were launching in Luma, so that is helping the margin, but fundamentally we are benefiting from scale impact, productivity, and a better performance on the device.
Speaker Change: Potentially some phasing on the are we going to position SG&A. So there is nothing to be read I think in terms of change in the underlying business between each one and its true. These are more of a number of things our position in time of shipment.
Speaker Change: And then we have some pricing that you are seen 3% on consumable for our smoke free business. So we are increasing price as well. And last element which is more marginal today but we are also improving the margin on real.
Speaker Change: Through the year in terms of investment.
Speaker Change: But I would say, we expect a strong year through the suits.
Speaker Change: As we go through the quarters and we've been flagging the fluctuation that we expect in some area and acceleration for Iqos in the secondaries in term of IMS, but that's not going to necessarily translate into shipments as the phasing for shipment can be a bit different so.
Speaker Change: so that it also helps. So as you can see we have many positive drivers behind our smoke-free business and smoke-free business is the driver for or the first driver for margin improvement.
Speaker Change: Okay, perfect, thank you so much, I'll pass it on Thank you [inaudible]
Thank you.
Speaker Change: Again, I think we expect strong strong momentum through the year for our smoke free portfolio we have.
Speaker Change: And our next question comes from Matt Smith, a steeple your line is open.
Speaker Change: In fact in the fact that on convertible we are positive in volume in Q1, but for the year, we expect a low single digit declines so that could mean that the.
Hi, Emmanuel. Thank you for the question. Good morning, let's...
Speaker Change: If we can first talk about the guidance outlook, with the strong first quarter and now the second quarter guidance, the first half EPS growth on a constant currency basis
Speaker Change: The second part of the year, we will have more negative.
Speaker Change: <unk> for a four hour our convertible, but clearly we expect strength through the year.
Speaker Change: is a few points above the high end of the full year outlook. Can you talk about the factors in the second half that we should take into consideration with the constant current TPS growth outlook implied to be a couple of points below the full year average by my math, just the shape of the year there?
Speaker Change: Thank you for that and as a follow up I wanted to talk about the IMS growth you referenced for Iqos.
Speaker Change: You had nice growth in the first quarter I think it was above 9%, but if we look back to the fourth quarter. It was around 13% and now you're expecting a reacceleration of IMS and Iqos IMS growth across the remainder of 2025. So can you talk about some of the underlying benefits to I M.
Speaker Change: I'm sure I'm happy to take that one. So, yes, we are saying that we expect to be well positioned versus...
Speaker Change: The overall bracket for the year in terms of revenue growth, we expect to be a bit above
Speaker Change: on O.I. Now you know that these are the traditional different that you can see during a year between H1 and H2. You may have some comparison basis.
Speaker Change: S growth re accelerating across the rest of 2025. Thank you I'll leave it there.
Speaker Change: Yes, so indeed 19, 4% was in line with our expectation they are.
that can play, there is.
potentially some
Facing on all we're going to position as GNAs.
Speaker Change: In Europe.
Speaker Change: <unk> rates, where they are with the turbulence coming from that.
Speaker Change: So there is here nothing to be read, I think, in terms of change in the underlying business between H1 and H2 These are more how a number of things are positioned in terms of shipment through the year, in terms of investment [inaudible]
Speaker Change: Yes.
Speaker Change: A flavor ban implementation in Europe.
Speaker Change: We believe that the impact will be.
Speaker Change: Lower in.
Speaker Change: In extra as we go through amortization and therefore, we expect <unk> and exploration is as I mentioned in the IMS growth in the second half in Europe.
but I would say we expect [inaudible]
A strong year as we go through the quarters.
and we've been playing the fact for instance that we...
Speaker Change: Otherwise we are expecting.
Speaker Change: We expect in some area an acceleration for icos in the second half of IMF.
Speaker Change: This 10% to 12%.
Speaker Change: Adjusted EPS growth through the year. So we expect overall continuation of a nice double digit growth Q4 was very strong after a few.
Speaker Change: But that's not going to necessarily translate into shipment as the fading for shipment can be a bit different, so...
Again, I think we will expect...
Speaker Change: A few a quarter that had been weaker last year. So you can have some savings for the year, but after this Q1, which was in line with expectation.
Speaker Change: Strong momentum through the year for our smoke-free portfolio. We've been fighting the fact that on combustible we are positive in volume into one but for the year we expect a low single-digit decline so that could mean that...
Speaker Change: We expect continuation of very good growth in Europe in Japan, and I took some time in my remarks to talk about the other markets, where we see also some very promising growth in our in several markets.
Speaker Change: The second part of the year will have more negative volume for our combustible but clearly we expect strength through the year.
Speaker Change: Thank you.
Speaker Change: Thank you for that. And as a follow-up, I wanted to talk about the IMS growth you referenced for ICOs.
Speaker Change: And our next question comes from Eric <unk> of Morgan Stanley. Your line is open.
Speaker Change: You had nice growth in the first quarter, I think it was above 9%, but if we look back to the fourth quarter, it was around 13%, now you're expecting a re-acceleration in those IMS.
Speaker Change: Great. Thanks for the question.
Speaker Change: Income.
Speaker Change: In terms of our full year guidance, you did raise the zinc shipment volumes.
Speaker Change: in ICO's IMS growth across the remainder of 2025. So, he talked about some of the underlying benefits to IMS growth re-accelerating across the rest of 2025. Thank you. I'll leave it there.
Speaker Change: And obviously, that's a very high margin product you kept the the.
Speaker Change: Constant currency EPS guidance. The same you delivered some very very robust.
Speaker Change: Yes, so indeed, 94% was in line with our expectation, and Europe was below the average, so there are always a turbulence coming from that.
Speaker Change: Margin expansion in the first half.
Speaker Change: Are there any specific offsets that you could point to that cause you to.
the Flavor Ban Implementation in Europe.
Speaker Change: To reiterate the guidance rather than flow some more through to the full year or is it more of a factor that we're early in the year and there is obviously a lot of macro and geopolitical uncertainty.
Speaker Change: We believe that the impact will be lower in...
Speaker Change: in H2 as it goes through an utilization and therefore we expect in H2 an acceleration as I mentioned in the IMS growth in the second half in Europe .
Speaker Change: Thank you Eric for the question. So indeed, we were targeting a year off.
Speaker Change: Very strong growth in performance and I think Q1 is flagging. The fact that we are well on track to deliver a year of strong growth. So we are confirming that we we expect a year of.
Speaker Change: I adjusted the MS growth to the year, so we expect overall a continuation of nine double-gid growth. Q4 was very strong after a few quarters that had been weaker last year, so you can have some inflating through the year.
Speaker Change: Very strong growth across the board.
Speaker Change: But after this Q1, which was in line with expectation, we expect continuation of very good growth in Europe , in Japan, and I took some time in my remarks to talk about the other market where we see also some very promising growth in the civil market.
Speaker Change: For <unk>.
Speaker Change: What we've seen in Q1 is indeed very reassuring on the fact that we're going to deliver the full year.
Speaker Change: We are.
Speaker Change: Raising our <unk> guidance for the volume for <unk> in the U S. By on average 20 million cancel yes. It is a very profitable brand, but not to the extent to dramatically change.
Thank you for watching!
Thank you [inaudible]
Speaker Change: And our next question comes from Eric Serotta if Morgan's family or line is open.
Speaker Change: Outlook for the year, So I would say that goes into various scenarios, which we are planning to.
Thank you for watching!
Great. Thanks for the question. On your income.
Speaker Change: To give us.
Speaker Change: The guidance for <unk> for the year.
In terms of the Folier guidance, you did raise...
Speaker Change: And obviously after only one quarter and in this.
Speaker Change: And Seth and volatile environment, we need to of course.
Speaker Change: And obviously, that's a very high margin product. You kept the, you know, the Compton currency, EPS guidance, the same. You, you know, delivered some very, very robust margin expansion in the first task.
Speaker Change: Be cautious and say this is the <unk>.
Speaker Change: Beginning of the year.
Speaker Change: And we are happy to confirm the guidance again, I think Q1 is showing that we are well on track to deliver a very good 2025.
Speaker Change: Are there any specific offsets that you could point to that cause you to reiterate the guidance rather than, you know, flow some more through to the full year? Or is it more of a factor that we're early in the year and there's...
Speaker Change: Great and then.
Speaker Change: Quick follow up how are you guys thinking about what the unconstrained growth for what the unconstrained offtake growth for example, theoretically looks like obviously you can observe it you could estimate it but.
Obviously a lot of macro and geopolitical uncertainty.
Speaker Change: How are you thinking about how that evolves, where it is today and sort of how it evolves as you get into the second half and next year, where the business is obviously a lot larger than when you bought it so I realize.
Speaker Change: Thank you, Eric, for the question. So, indeed, we were targeting a year of...
very strong words and performance, and I think...
Speaker Change: Q1 is flagging the fact that we are well on track to deliver a year of strong growth.
Speaker Change: You can't give a precise answer but any color there would be helpful.
Speaker Change: Eric.
Speaker Change: So, we are confirming that we expect a year of very strong growth across the board for PMI. What we've seen in Q1 is indeed very reassuring on the fact that we're going to deliver this from year.
Speaker Change: Frankly, we don't know of course, what is the unconstrained demand because the demand is still constrained so I'm not able to provide an answer what I can say is that certainly as we are.
Speaker Change: Removing the limitation.
Speaker Change: The out of stock situation.
Speaker Change: We are raising the guidance for the volume for Zine in the US by, on average, 20 million
Speaker Change: We expect an acceleration in the consumer offtake.
Speaker Change: And we are very much encouraged by.
Speaker Change: It is a very profitable brand, but not to the extent to dramatically change the outlook for the year, so I would say that goes into various scenarios which we are playing to
Speaker Change: It's a very nice dynamism of of the category, which showed the appears the attraction for the consumer and all this legal edge nicotine use is that all just covering the category and and understand the benefits. So we are we expect the acceleration.
Speaker Change: We're gonna be gradually back to normal life, because its true we have been mentioning that we had very limited commercial marketing activity. So we were trying to service the existing zinc consumer and we knew that it was not reasonable to try to acquire new consumers that sound that we could not.
and certain Volatine environment.
Speaker Change: We need to, of course, be cautious and say this is the beginning of the year and we are happy to confirm the guidance. Again, I think you one is showing that we are well on track to deliver a very good 2025.
Speaker Change: We can observe in supply. So obviously, that's going to be also another leg of the growth in the coming quarter and and.
Great, and then a quick follow-up.
Speaker Change: How are you guys thinking about what the unconstrained growth for, what the unconstrained, you know, off-take growth for Zen?
Speaker Change: And I guess that that's certainly something you, including unconstrained demand, but frankly, I don't want to speculate on what decent constrained demand is going to be.
Theoretically Looks Like [inaudible]
Speaker Change: We are expecting a gradual acceleration of the consumer offtake closing in the coming months.
Obviously, you can't observe it, you could estimate it, but...
Speaker Change: How are you thinking about how that evolves, where it is today, and how it evolves as you get into the second half and next year where the business is obviously a lot larger than when you bought it. So, really, you can't give a precise answer, but any color there would be helpful. Thank you very much.
Speaker Change: Fair enough and then just one quick last one you did cite the Nielsen data in terms of then are you seeing different trends.
Speaker Change: Our diverging trends when you look at some of the the non tracked channels that you would have a better read on then Ah. Yeah, then we would.
Speaker Change: Eric, frankly, we don't know of course what is the unconstrained demand because the demand is still constrained, so I'm not able to provide an answer. What I can say is that certainly as we are removing the limitation and the out of stock situation, we expect a mixilleration in the consumer of take.
Speaker Change: Well I mean I.
Speaker Change: Certainly don't want to say that NUCYNTA.
Speaker Change: An interesting data points, but of course, it's 3000 sales points and.
Speaker Change: The universe of properties close to 200000.
Speaker Change: And when you're going out of stock situation you can create some distortion.
Speaker Change: On the perception of the consumer offtake, so I'm not able to say whether the 15%.
and we are very much encouraged by...
Speaker Change: The very nice dynamism of the category which shows the appeal, the attraction for the consumer and all this legal edge nicotine user that are discovering the category and understand the benefit so we expect the acceleration. Thank you very much.
Speaker Change: It's an estimate.
Speaker Change: What I was reporting is the MSA. So the very nice acceleration towards the end of March of the sales from all center and distributors to the retailers.
But that's the other that I point out that we have.
Speaker Change: We're going to be gradually back to normal life because it's true we've been mentioning that we are very limited.
Speaker Change: But but we don't have any other I would say reliable data we could share with you we can sense in the market.
Speaker Change: Commercial Marketing Activities, so we were trying to service the existing ZIN consumer, and we knew that it was not reasonable to try to acquire a new consumer, the time that we could not...
Speaker Change: Very strong underlying demand for <unk>, that's that's very clear and I also flagged the fact that the consumer offtake, so what Nielsen measured last year for first quarter than probably significantly higher than the 113 million Ken that we reported for the for the for the <unk>.
Speaker Change: We cannot serve and supply. So obviously that's going to be also another leg of the growth in the coming quarter and
Speaker Change: And, you know, I guess that's certainly something you include in unconstraintement. But frankly, I don't want to speculate on what disenconstraintement is going to be. We are expecting a gradual acceleration of the consumer of take falls in in the coming months.
Speaker Change: The first quarter of 2024, so that was the basis on which you should apply the 15 percentage that 15% is accurate to have an idea of the consumer offtake today.
Speaker Change: Terrific. Thank you so much I'll pass it on thank you.
Speaker Change: And as a reminder, if you have a question. Please press star one one our next question comes from Bank of UBS. Your line is open.
Speaker Change: Serotta, and then just one quick last one. You did cite the Nielsen data in terms of Vin. Are you seeing different trends or diverging trends when you look at some of the non-track channels that you would have a better read on than we would?
Speaker Change: Good morning, guys. Thanks for taking the question Hey, Manny I'll a couple of questions from me as well.
Speaker Change: Just coming back to the growth that's in and the Offtake are you are you in a position to potentially share what the MSA data highlights is the growth rate for four 4% and how it really compares to this sort of 30 to 30% to 35%.
Speaker Change: Well, I mean, I certainly don't want to say that Nilsen is not an interesting data point, but of course it's 3000
Speaker Change: Says Point, and you know, the University of Italy is close to 200,000.
Speaker Change: And when you announce a situation, you can create some distortion.
Speaker Change: Growth you highlight for the category.
Speaker Change: on the perception of the consumer of tech. So, I'm not able to say whether the 15%, I mean, we know it's an estimate. What I was reporting is the MSA, so the very nice acceleration toward the end of March, of the sales from all seller and distributed to the retailers.
Speaker Change: Question.
Speaker Change: Sticking with the U S and NII cost I just wanted to get your views on the recent movements at the CDP and how that impacts the timing of.
Speaker Change: This launch in the market or whether it does impact.
But that's, you know, the other type that we have.
Speaker Change: The timing of the launch would be helpful and the final question is really hot housekeeping.
Speaker Change: But we don't have any other, I would say, reliable data we could share with you. We can send in the market.
Speaker Change: Interest guidance for the year would be would be helpful.
Speaker Change: Yeah.
Speaker Change: The very strong underlying demand for Zine, that's very clear. And I also flagged the fact that...
Speaker Change: Sorry, I missed I missed the last question from.
Speaker Change: You said that the.
Speaker Change: Net interest cost guidance for the year would be helpful. Please.
Speaker Change: The consumer of text, what? Nifson measured last year for first quarter.
Speaker Change: then probably significantly higher than the 1,030 million can that we reported for the
Speaker Change: Yes, so taking your question in the order grew something I think we said that the share was close to 66% on MSA in March.
Speaker Change: for the 1st quarter of 2024. So that was the basis on which you should apply the 15% if the 15% is accurate to have an idea of the consumer of take today.
Speaker Change: Probably a growth run of close to 30%, but you know that.
Speaker Change: That with a pinch of salt in the tree of very precise data clearly G.
Speaker Change: Sure. Thanks. Thank you so much. I'll pass it on. Thank you. Thank you. And as a reminder, if you have a question, please press star 11. Our next question comes from Fahum Badg of UBS. Your line is open.
Speaker Change: The MSA was with shrink this acceleration is more products was was it was what's coming so that's that's one thing.
Speaker Change: On the.
Speaker Change: The news was situated at the CGP and what it what it means for Iqos no. It's too early to say so we have nothing to report and and I don't know what the.
I'm sorry. I'm sorry. I'm sorry. I'm sorry.
Speaker Change: Good morning, guys. Thank you for taking the question. Hey, Emmanuel, a couple of questions from me as well.
Speaker Change: What is going to happen I think we are still opening for.
Speaker Change: An efficient process to be put in place and for the FDA to comply with a with a with a mandate which was to give answer after six months.
Emmanuel: What the MSA data highlights is the growth rate for for for present and and how it really compares to this sort of 30 to 35% growth you highlight for for for for for the category the same question.
Speaker Change: But I have nothing at that stage.
Speaker Change: New to report on the on this situation.
Speaker Change: And on the on the net interest for the <unk> for the for the year I think you have as a performance in Q1 I don't have at this stage nothing specific to tell you for the for the full year, we're not providing any additional debt for the full year, but of course, we started whereas the year Nevertheless, with some.
Emmanuel: Speaking with the US and Icos, I just wanted to get your views on the recent movements at the ATP and how that impacts.
Emmanuel: The timing of aluminum launch in the market or whether it does impact the timing of the launch would be helpful. And the final question is really how housekeeping net interest guidance for the year would be helpful.
Speaker Change: Positive impact coming from.
Speaker Change: Mark to market on the on some of our edgy.
Speaker Change: Hedging.
Emmanuel: Thanks Emmanuel Thank you.
Sorry, I missed the last question.
Speaker Change: Thank you I'm showing no further questions at this time I would like to turn it back to James <unk> for closing remarks.
Emmanuel: The net interest cost guidance for the year would be helpful please.
Speaker Change: Thank you that concludes our call today.
Thank you.
Speaker Change: Please be aware that the scripts from the call is posted on our website for any of you that may have had some.
Emmanuel: Yeah, so taking your question in the order, growth of the nation, we said that the share...
Speaker Change: Sound issues partway through the the webcast broadcast thank you very much for joining us. If you have any follow up questions. Please do contact the Investor Relations team. Thank you again and have a nice day.
Speaker Change: You Institute soon thank you.
Speaker Change: This concludes today's conference call. Thank you for participating and you may now disconnect.
was coming, so that's one thing. On the...
Emmanuel: You know, the new situation at the CTP and what it means for Icos. No, it's too early to say. So we have nothing to report and I don't know what is going to happen. I think we are still hoping for an efficient process to be put in place.
Emmanuel: and for the FDA to comply with the mandate which was to give answer after six months, but I have nothing at that stage new to report on the situation.
for the year. I think you have...
The performance in Q1, I don't have it, that's it.
Emmanuel: Nothing specific to tell you for the full year, we're not providing any additional data for the full year but of course we started well the year nevertheless with some positive impact coming from a market market on some of our aging.
Thanks for watching!
Thanks a lot, Neil. Thank you.
Speaker Change: Thank you. I'm showing no further questions at this time. I'd like to turn it back to James Bushnell for closing remarks.
James Bushnell: Thank you. That concludes our call today. Please be aware that the script from the call is posted on our website for any of you that may have had some sound issues partway through the the webcast broadcast. Thank you very much for joining us. If you have any follow up questions, please do contact the investor relations team. Thank you again and have a nice day. Thank you very much for joining us.
Thank you all, and see you soon, thank you
James Bushnell: This concludes today's conference call. Thank you for participating and you may now disconnect.
James Bushnell: This is the story of a young man named Emmanuel Babeau. He was a young man in his early 20s. He was a young man in his early 20s. He was a young man in his early 20s. He was a young man in his early 20s.
Thank you for watching!
[inaudible]
Respect Yourself
Speaker Change: Good day, and thank you for standing by. Welcome to the Philip Morris International 2025 First Quarter results conference call. At this time, all participants are in a listen-only mode.
Speaker Change: After the speaker's presentation, there will be a question and answer session to ask a question during the session You will need to press Star 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press Star 1 on again.
Speaker Change: Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today. James Bushnell, Vice President of Investor Relations and Financial Communications, please go ahead.
Speaker Change: Welcome, thank you for joining us. Earlier today we issued a press release containing detailed information on our 2025 first quarter results. The press release is available on our website at PMI.com
A glossary of terms, including the definition for smoke-free products [inaudible]
Speaker Change: as well as adjustments, other calculations and reconciliations to the most directly comparable
for non-GAAP financial Measures, cited in this presentation.
Speaker Change: are available in Exhibit 99.2 to the company's 4 make K, dated April 23rd, 2025, and on our Investor Relations website.
Speaker Change: Today's remarks contain forward-looking statements and projections of future results. I direct your attention to the forward-looking and cautionary statements disclosure in today's presentation and press release for a review of the various factors that could cause actual results to differ materially from projections or forward-looking statements.
I'm joined today by Emmanuel Babeau, Chief Financial Officer
Over to you, Emmanuel [inaudible]
Thank you, James, and welcome everyone.
Speaker Change: In Q1, we delivered a very strong start to the year with all key elements of the business contributing strongly.
Speaker Change: to deliver double digits increases in organic net revenue, operating income, and adjusted deleted EPS in both consumer currency and the law terms.
Our smoke-free business performed exceptionally well across all areas.
with shipment volumes up plus 14.4% year on year.
Speaker Change: Organic net revenue growth of plus 20% and outstanding organic growth profit growth of plus 33% as all three small free categories extended growth margin.
Speaker Change: This was especially fueled by the rapid growth of zine and the continued volume momentum operating leverage and scale benefit of icos [inaudible]
Speaker Change: Our smoke-free business now accounts for 44% of total growth profit, as we continue to deploy our multi-categories strategy across markets and broaden our growth opportunities.
Speaker Change: Icos, delivered close to plus 10% HTU-adjusted IML growth, with continued strong performance both in Japan and Europe , despite the annualization impact of the EU characterising flavour ban.
Speaker Change: We expect double-edged growth for the rest of the year.
Then, once again, delivered strong growth in the U.S.
with shipments increasing by an impressive plus 53%
Speaker Change: to reach 202 million cans, exceeding our initial expectations as demand remains strong and production capacity increases a rate of schedule in the latter part of March, enabling some initial replenishment of trade inventories.
Speaker Change: International nicotine pouch can volumes, also grew by plus 53%, or by plus 182%, excluding the Nordics, demonstrating the global dynamism of this emerging category.
Speaker Change: In EVAPER, the Q1 performance was impressive, demonstrating its increasing contribution within our multi-category offering.
Speaker Change: Shipments more than doubled year-on-year and gross margin further expanded, driven by strong pot growth in Europe as we increase our distribution and commercial activity.
and Jacek Olczak.
Jacek Olczak: Within combustible, overall volume growth coupled with strong pricing and ongoing cost initiative
Jacek Olczak: Draw a robust performance, despite notably negative geographic mix from increased volumes in lower margin markets.
Jacek Olczak: Overall, the very strong and increasingly profitable underlying growth of our smoke-free business.
Jacek Olczak: who has coupled with very solid, combustible results and the added benefit of favorable shipment timing.
Jacek Olczak: This allowed us to deliver plus 16% organic operating income growth and plus 250 basis point of expansion in adjusted O.I. margin to reach 40.7%.
Jacek Olczak: and resulted in strong double digit adjusted deleted EPS growth in both currency neutral and the lot terms, despite currency adwinds.
Jacek Olczak: While it is early in the year, and there are a number of uncertainty into global economic outlook, we remain confident that we will achieve another year of super growth.
Jacek Olczak: As such, we now focus WGT-Adjusted Deloitte DPS Gross at prevailing exchange rates.
Thank you. Thank you. Thank you.
Turning to the Adline Numbers
Jacek Olczak: We delivered volume growth of plus 3.9% reflecting the very strong dynamism of our smoke-free business.
Jacek Olczak: Combined with strong pricing and despite unfavorable, combustible mix, we delivered double digit organic netriving growth of plus 10.2%, reaching $9.3 billion in total.
I'm sorry, I'm sorry, I'm sorry, I'm sorry, I'm sorry
Jacek Olczak: There was also a technical impact from the change in commercial model for the Indonesia Bilo T1 cigarette segment where we now act as a handling agent.
Jacek Olczak: This results in lower nature venue and coastal goods sold, but has no meaningful impact on gross profit or operating income.
Jacek Olczak: Excluding this effect, which will notably affect the first three quarters of the year, Organic net-driven news grew by around plus 12 percent.
Jacek Olczak: And as I mentioned, our smoke free business was the primary driver behind our organic adjusted O.I. growth of plus 16% or plus 12.8% in dollar term.
Jacek Olczak: P1 Adjusted Deleted EPS grew by plus 17.3% in constant currency and by plus 12.7% in dollar terms to $1.69.
Jacek Olczak: This includes a seven cent unfavorable currency variance, notably due to non-recurring transactional losses in the quarter linked to currency volatility.
Jacek Olczak: This stronger than expected performance was primarily driven by the top line and gross margin result of our smoke free business
Jacek Olczak: Excellent Zin performance was further enhanced by the great work of our manufacturing team in accelerating capacity initiative.
Jacek Olczak: Strong ICOHTU Sheatman Gross includes a robust performance in Europe and around 1 billion unit in favorable shipment timing which we expect to reverse in H2.
This was complemented by the resilience of our combustible business.
I'm sorry, I'm sorry, I'm sorry, I'm sorry, I'm sorry
Jacek Olczak: Looking at category performance in more detail, our smoke free business grew net revenue by plus 20.4% and growth profit by plus 33.1%
Jacek Olczak: This led to an impressive plus 670 basis point of organic gross margin expansion to surpass 70 percent more than five points above the gross margin of combustible at the current category and geographic mix of SSP's.
[inaudible]
Jacek Olczak: As I mentioned, this reflects an acceleration in gross margin expansion for all three smoke-free categories, notably combined with the positive mixed impact of Zins' Accurative Unit Economics and pricing on both H2U's and Zins.
Jacek Olczak: Very strong icos, gross margin expansion reflects the powerful growth and scale effect of this large and growing business, manufacturing productivity, and a comparison benefit from higher device shipment in the prior year when Illuma Eye was launched in Japan.
Jacek Olczak: On an organic basis, combustible net revenues and growth profit grew by plus 3.8 and plus 5.3% respectively.
Jacek Olczak: While pricing was strong and volume were positive, there was a notably negative geographic mix is quoted due to growth in markets such as Turkey and Egypt in addition to the technical impact from Indonesia.
Jacek Olczak: We expect both pricing and negative geographic mix to moderate over the rest of the year and target with combustible gross margin expansion organically and in dollar terms.
Jacek Olczak: As expected, input cost Edwin's yield compared to recent years, and based on current assumption, we expect this to further improve in 2026.
Jacek Olczak: Taking a closer look at our volumes, Shipman Gross of Plot 3.9% was primarily driven by our smoke free business, with all categories contributing positively and placing us on track for a fifth consecutive year of total volume growth.
Jacek Olczak: Smoke 3 volumes, grew by plus 14.4%, above our fully-attached range of plus 12% to plus 14%. Reflecting Very positive contribution from ICOs, Zinn and Viz.
Jacek Olczak: In addition to the growth of these three brands, which I covered earlier, I would also know that our old smoke-free business included US moist snuff and Scandinavian snooze, which declined modestly in the quarter.
Jacek Olczak: Despite this, all those more free-product shipment growth accelerated versus the Priya
Jacek Olczak: cigarette volumes were positive for the fourth consecutive quarter as we grew share in a modestly declining industry with continued growth in markets where smoke-free products are permitted, such as Turkey and India.
[inaudible]
Jacek Olczak: You have heard us talk recently about our multi-categories strategy for smoke-free product as we leverage on the strengths of the ICO's brand and commercial infrastructure in the national market to accelerate incremental growth from zine and viv.
Jacek Olczak: This is evidenced by our strong, smoke-reportal results in Q1, with visible accretion across
Jacek Olczak: We have 46 markets with multiple small pre-offering, including 16 with all 3 PMI categories on
Jacek Olczak: The execution of this three-pronged strategy is generating positive results in markets such as the Czech Republic, Romania, Switzerland, and our global travel retail business in addition to promising stars in the UK and Italy.
Jacek Olczak: It is also helping to bolster our position as the Global Smooth Free Champion.
[inaudible]
Jacek Olczak: WGQ1 organic net-driven growth was, again, driven by all three key elements of our structural growth model, namely volumes, pricing, and smoke-fremix.
Jacek Olczak: Pricing contributed plus six points, reflecting over plus 8% combustible pricing, and around plus 3% for smoke-free excluding devices.
Jacek Olczak: The positive-mix impact of the shift to smoke-free product, including US smoke-free mix, drove a further positive contribution of plus 3.1 point.
Jacek Olczak: Overall, combustible geographic mix and other factors add an unfavorable impact of 2.7 points.
Jacek Olczak: This was more negative than in Priya Quarters, reflecting the technical Indonesia impact and incompressible market-mixed dynamics I explained earlier.
Jacek Olczak: Currency had a negative impact of 3.9 points with a further 0.5 points from acquisition and divestiture, which include the divestment of thectura.
[inaudible]
Jacek Olczak: Turning now to Gross Margin, we delivered very strong expansion of 340 beddies points on an organic and plus 360 beddies points including currency, acquisition and divestitures.
Jacek Olczak: This comprised plus 180 basis points from pricing, more than offsetting an 80 basis point unfavorable impact from cost inflation, net of productivity and other cost items.
Jacek Olczak: Smoke Free Growth delivered an excellent plus 230 basis point with a flat contribution from combustible, excluding pricing, but including the Indonesia impact.
Jacek Olczak: This excellent gross margin performance, supported strong adjusted operating con margin expansion of 250 bedis points, or plus 200 bedis points organically, after accounting for the current dynamics of our cost, the divestiture of victura, and others called effects.
Jacek Olczak: This impressive margin expansion was delivered despite a 140 basis point impact of higher LGNA costs driven by continued investment in our small pre-growth, including U.S. investments, a low cost comparison in the prior year and the impact of 2025 investment phases.
Jacek Olczak: As we continue to invest in top-line growth, we target organic SG&E growth broadly in line with natural growth for the year.
Thank you very much.
Jacek Olczak: We continue to drive manufacturing and back office efficiency and delivered over one of $180 million in gross cost saving in Q1 across both cost of goods sold and LGN.
Jacek Olczak: After more than $750 million of savings in 2024, this places us nicely on track to achieve our $2 billion target of the 2024-2026.
Thank you for watching!
Focusing now on our ICOs business.
Jacek Olczak: As expected, calendar effects and EU flavor ban annualization impacted Q1-adjusted IMS, however the delivery of plus 9.4% growth despite these factors marks continued strong and underlying momentum.
Jacek Olczak: We expect double digit progress in the balance of the year, in line with our target of plus 10 to plus 12,000 girls.
Jacek Olczak: Supporting these are commercial initiatives around brand building and continuous innovation on devices and consumable as we progressively roll out Illuma Eye and new consumable variants of Terria,
Jacek Olczak: Over the long term, we have a rich icosinnovation pipeline to further enhance the breadth and quality of the user experience with the iconic brand.
as disclosed in our latest integrated report.
Jacek Olczak: Over 99% of our 2024 adjusted R&D spend was on smoke-free product, consistent with the last four years, as we continue to drive consumer-centered product development.
Thank you for watching!
Jacek Olczak: Turning to Europe where we are building on the strength of our ICOs business to create an integrated, multi-category portfolio to accelerate consumer switching and value creation.
Jacek Olczak: Total shipments of our flagship smoke free brand, advanced by plus 17.5% into one, with an increasing contribution from both Zine and Veer.
Jacek Olczak: ICO's H.T.U. shipments grew more than 15 percent, including a positive comparison impact from the Priya's year.
Jacek Olczak: Our investment in brand building initiatives are exemplified by the recent partnership with Renaud Italian designer Celetti at Milan Design Week as part of the ICO's Curious X campaign.
Jacek Olczak: For ICOs, Q1HTU-adjusted IMS, grew by plus 7.4%, as we further accelerated our share of cigarettes and HTUs to a record 11.4%.
Jacek Olczak: Many markets in the region grew adjusted AMS by double digits, including I think growth or more in Spain, Germany, Bulgaria and Greece.
Jacek Olczak: This dynamism, more than compensated for pleasure by an organization which has flagged last quarter, but especially it belongs to one and most notably to one.
Jacek Olczak: I am particularly pleased to report that the control market carry Italy is standing well in the record I of 80 from 4% to 1% and currently it increases to the quarter
Jacek Olczak: Overall, regional Q1-adjusted AMS growth was in line with our expectation, and we expect another robust quarter in Q2, followed by a next generation in the Q2M.
Jacek Olczak: Our experience of the freezer dining class remains intense with the boldly consistent pattern of recovery of cost-market
Jacek Olczak: We continue to expect an impact of her own 1 billion units in 2025, primary due to annualization on the Hungarian and Slovakia, implementing the ban for far this year.
Jacek Olczak: The most notable many markets in Poland, where the future debt will be in early 2020.
Thank you. Bye.
Jacek Olczak: We also continue to roll out new and true vines of our two-backed hopefully considerable
which is driving committee members.
Jacek Olczak: This is well-illustrated by Sangarin, Bolivia with a double-digit share of Tumai accused, less than three months from long.
Thank you for watching!
Jacek Olczak: Our commitment to progress in religion is highlighted by the Commission goes to see if you have prepared.
Jacek Olczak: This also includes, and Gary, well, Budapest, Terry, almost forty-six percent, over four points higher than those two.
Jacek Olczak: impressively 24 of the 34 markets that I could present in Europe .
Jacek Olczak: have crossed the 10% QCCR mark to hit the goal of 30%.
Jacek Olczak: Notable pull-out across the region into London, Vienna, Zurich, Lisbon and Athens.
Jacek Olczak: The regulatory law case is an important determinant of more pre-progress, and we are encouraged by recent produces development in the number of markets which utilize the role of tobacco harm
Jacek Olczak: and Hungary, where factual and science-based communication to consumers on property products is allowed, which is a total advertising ban for from yesterday.
[inaudible]
Jacek Olczak: In Japan, we deliver XCU-adjusted IMF growth of close 9.2 percent, a 60-leaf marking the 10th quarter of W's growth after accounting for the list year.
Jacek Olczak: HPU adjusted share increased by 3.0% year-on-year and plus 1.6 points sequentially to reach 32.2% further highlighting the dynamism of the innovative high-cost brand and product portfolio in this new market.
Thank you.
Jacek Olczak: The overall smoke-free category continues its progress, reaching almost 48% on a national offset basis in March, with 13 cities and 8 prefectures now crossing the 50% threshold.
[inaudible]
I'm sorry. I'm sorry. I'm sorry. I'm sorry.
Jacek Olczak: Giovering, we continue to see very strong icose performance, as illustrated by CCC of X-ray.
Jacek Olczak: I like to include in quite some of the earlier roles in the typical of Indonesia and Mexico, so that I could share.
Jacek Olczak: Robust progress in the Middle East and North Africa, and strong growth in Belgrade with 17.7% share despite increased competitive activity.
Jacek Olczak: I coached with a new eye in South Korea with a 14.1% share in sales supported by the loss of a new eye in a highly competitive market.
Jacek Olczak: Profeccia Praponauts in Cereo, continues to be optically impacted by the growth of the combustible market to a competitive supply as normalize.
Jacek Olczak: Also, what I like to do is the excellent growth of our global travel into Germany, which is a leading space for our multi-fategory offerings.
Jacek Olczak: We are recorded soon as we vote across all regions in the chair of over 18% now both are equal to 7.
Jacek Olczak: In the US, Aklan, will comment direct sales of ICOC devices and HPUs to know CPEXTAS, again of
Following targeted engagement with legal administration consumers over recent months.
Jacek Olczak: While intentionally small scale, we have received no interest with further ICOC pilot plans in the coming months, as we prepare for the actual launch of ICOC in the month.
Jacek Olczak: As a reminder, we are not assuming any significant HDV volume from the US in our foodie program.
Jacek Olczak: Pouching to Zinda, which continues to resonate strongly with other Pouching users as a superior product in Spanium Grande TT, and deliver excellent results.
Jacek Olczak: Continued to demand an increased production capacity, enabled shipment volume growth of the 63 percent, in which over 200 million can for the quarter.
Jacek Olczak: Though we should note the prior efforts of the future notable depotation of the fair and distributed stock levels and therefore the stellar volume higher than cheap men and this quarter included the beginning authority management.
Jacek Olczak: As we continue to expand production at our Owen's Borough Plan, we accelerate the one plan step in this process to the later part of March.
Jacek Olczak: This enabled three achievements at both the end, and a put forward of initial disability
Jacek Olczak: With very limited flow through of this additional shipment to returning the quarter, this will not yet have a meaningful impact on its total availability [inaudible]
Jacek Olczak: We can get full normalization of the supply situation in 23 this year.
Jacek Olczak: They continue to perform very robustly, at retail, given the certain sensors, with some double-edged octet rows. According to Nintendo, two and an octet volume, moved by around plus 15% here and here, the statutory value share remaining strong at over 70%, despite as you completely found soon.
Jacek Olczak: While Nietzsche's data is based on only a small sample of gold, it also shows our off-text voting shares as being held back by availability and is planned by 1.4.5 points to the contrary.
61.5 percent.
Jacek Olczak: We already observed our share on MS data which measures treatment from distributed to retail. We cover to almost 66 percent enough on the limited close to I just mentioned.
with the category of sex growing at the wrong rate, just starting to dress up to try to turn.
Jacek Olczak: was the leading brand in supply concern to expect green effect to gradually accelerate in the coming month, has installed availability in food and we reactivate commercial and marketing in food.
Jacek Olczak: The remain excited about the growth prospects of the dynamic category and its potential to regulate, continue from cigarettes, from other traditional forms of tobacco.
Jacek Olczak: Wynne remains the only new cutting-out product authorized by the FDA, and this includes all variants in both three and six milligrams length, currently commercialized EVA.
Jacek Olczak: As I would like a tagging, there is a large addressable market in the millions of legal legal experts in the U.S. and we plan to get more actively beyond our existing consumer
Thank you for watching!
Jacek Olczak: Indeed, the strong latent demand and capacity expansion ahead of target now reigns our treatment process to 800 to 800 and cost a million pounds for the year.
I'm sorry, I'm sorry, I'm sorry, I'm sorry, I'm sorry
Jacek Olczak: With the outstanding effort of our team on the ground, we continue to work on increasing capacity in our scientific facility.
Jacek Olczak: Construction of our second U.S. mannequin slide in Colorado is well in the way we thought it can be determined in early 2006.
Jacek Olczak: We remain as we have been against the US, committed to investing in US manufacturing. The potential investments we have made in the US are expected to continue to result in significant cooperation and a preliminary contribution to the concept.
[inaudible]
Jacek Olczak: I will start the US now. We continue to roll out the leveraging of our presence with high-cost
Jacek Olczak: The total international nicotine called category is nation in almost two years at the end and 10 at the wrong half, the size of the US is limited.
Jacek Olczak: We are now in just the eighth market globally, following two volunteers to the UAE and Columbia, and we'll see it with all the admissible market, as many cool opportunities we're going to be in this year's case today.
Jacek Olczak: Using the pledge to defeat the 10 votes of the International vote for Stem's volume, she went almost settled outside of the Nordic, including commission momentum in the European market because of Priya, Gizelle and Gigi K, where we commence the national check-out roll-out.
Jacek Olczak: In Emerald Market, Concorde des Continues in Pakistan, Mexico and South Africa
Jacek Olczak: Here my global television is a notable shout out as it also increases global visibility and awareness of them using our mythical category of film.
Finally, could you allow us to look for the comment with Gizelle?
Jacek Olczak: This played an increasingly important role within our multi-category unit, with growing volumes and growth margins.
Jacek Olczak: Chicken volume, double-gir on yet, 0.6 billion on an equivalent unit baby.
Jacek Olczak: Even by very good performance in Europe , where the participants continue to be fully, partially at the extent of this possible, even if we've done, and restriction for this format.
Jacek Olczak: He observed increasing V1 adoption rates and low abandonment across the market, which is testament to the policy and implementation of this standard product to be the right species.
. . . . .
Thank you for watching!
Samoonskyo Condustible
Jacek Olczak: Our business is from Robinson, C1, with organic natural growth of the people in 8% or closer to
Jacek Olczak: Beat was reasoned by stone pricing of plus 10.2% with multiple contributions from Turkey, Poland and Yemen.
Jacek Olczak: He is a less-coverable tiny dynamic in H.E. We continue to expect truly a considerable glycine of the size of H.E.
Thanks for watching!
Jacek Olczak: The cigarette industry declined by 1.3% in 2001 due to growth in geography where smoke-free products are nascent or not present, more than offset by accelerated cigarette declines and so on.
Jacek Olczak: where SFCs are not terminated as in Turkey or India, we expect these divergences to continue to focus in some cases by demographic trends. Nonetheless, we continue to expect a low
Thank you for watching!
Jacek Olczak: Let's go and share what's cool, growing zero from 4.1 to 1, finally due to physical marketing.
Jacek Olczak: Both Margo and I were viewpoints of to you with both sides cut for their eyes.
Jacek Olczak: To continue to target Bowley's scheduled category share of a time, we need our mentor to be maximizing value and supporting the growth of most recovery.
Jacek Olczak: Most importantly, combustible organ growth for continuing to grow to over-clean at the site of 6 to 10, following the recovery of 12 to 24
[inaudible]
This brings us to our Outlook for 2025.
Jacek Olczak: He delivered a very strong cost order, including better than expected modern, and we remain confident to get a piece another year of stickerable.
Jacek Olczak: As such, we are reconcerning the 30-minute-of-go outlook and provided in February despite that drop of increase in
Jacek Olczak: As a global company, we've broadly diversified the adoption of the worldwide crypto-emotor, including MSNHQS in the present day. We believe we are well-positioned to mitigate certain social
Jacek Olczak: You are the situation in volatile, you do not turn to anticipate a metanyl impact on our business from
Jacek Olczak: We expect a continuation of some momentum from our smoke free business, including the benefit of further multi-tategorically economy.
Jacek Olczak: As I explained, we are raising our healthcare for US insurance. We are talking again.
Jacek Olczak: This further support, our focus, of plus 14% effective treatment goals, which incorporate ancient
Jacek Olczak: You will still continue to expect totals in my organic net within the rules, in the end of plus six to plus eight to ten to ten [inaudible]
Jacek Olczak: Organic Operating Income Growth of the Central Tribes in the United States.
$7.49
Jacek Olczak: This now reflects the 12th plus 14th percent growth in dollar terms and includes a favorable estimated
Jacek Olczak: which reflects vision strength in the Euro, Japan's Jain, and Russian Liberals, possibly upset by a senior
What do you see?
Jacek Olczak: The S.U. H.P.U. Shipman volume of 37th on Clive is 13th on Clive Billion, with another supporter of a new adjusted IMF bill of the long-term sentiment.
Jacek Olczak: For U.S. Wins, we expect shipments to be at a similar level to C1, a straight restocking
Jacek Olczak: In short, I've adjusted a little bit here of $1.18 to $1.85, including a favorable current design of $6.10 at
Jacek Olczak: To expect the Stone H1 overall, these organs naturally grow around the high end of our second rent for the two years, and for the next two, I wrote slightly above.
Thank you for watching!
Jacek Olczak: With regard to our balance, delivery in remains a key priority, and we continue to target further reduction in 2020-05, letting us on track for our target ratio of her own two times as
[inaudible]
Thank you for watching!
Jacek Olczak: We believe our both-so-file investment class will be not kept in the booth, as soon as I will see the target target, which we are well on track to meet or to meet.
Jacek Olczak: Adjustability ECS Road in July 10th, in the 2 priority, and as demonstrated in 2024, we are committed to taking the core to step to manage the potential turn to volatility, including to our aging activity.
Jacek Olczak: Behind the delivery of our goods lie the enormous effort we have made to perform our business over the last few years, and the continued drive towards our ambition to become a century more free.
Jacek Olczak: Deep Quarter coincides with the publication of the sixth edition of our annual Integrated Resource, which provides a comprehensive view of our company's performance across both financial and non-financial dimensions.
Jacek Olczak: I like to include the important efforts and actions we are taking in regards to youth access prevention as well as the progress we have made on our operational efficiency.
Thanks to me, our resilience, rising innovation, and ultimately, future-proofing our disease.
Jacek Olczak: I'll explain in detail. Our approach to sustainability is fundamentally business-driven, with the objective of both destiny and an entry to the growth of our social transformation to drive continued value creation.
Jacek Olczak: I would encourage anyone with an interest in how and why we are performing to read it.
I will now conclude today's presentation with some timetable
Jacek Olczak: While no companion in union to macroeconomical equality team, we believe we are all positioned to navigate external dynamics.
Jacek Olczak: We have 3,000 growth drivers with striking power and positive smoke-free category on top of the growth, where we target our chief consecutive year of extension led by ICO, ZIM and ZIM.
As we caught it in the totally behind our smoke redone. [inaudible]
Jacek Olczak: These drivers are also coffee-acreatives and combined with our quite few measures on pricing on cost, we have great confidence in sustainable accessibility, EPS growth in both current chemicals and the rough end.
Jacek Olczak: Finally, we will remain a highly conservative business with an unwavering commitment to our
Jacek Olczak: We look forward to further rewarding our shareholders as our transformation delivers a sustainable growth.
Jacek Olczak: Thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again and please standby, while we compile our Q&A roster.
Speaker Change: And our first question comes from Bonnie Herzog of Goldman Sachs. Your line is open.
Bonnie Herzog: Great. Thank you, hi, Emmanuel and everyone I am Hi, I had a few questions on San could you maybe give us some more color on the out of stock issues, you might still be experiencing in the U S. I know you touched on this but I'm just curious how long you think it will take for retailers to rebuild their inventories.
Bonnie Herzog: And I know you raised your shipment guidance for <unk> for the year, but.
Bonnie Herzog: It does still imply that growth will decelerate year over year to around I think 35% for the rest of the year. This is at the low end of your range versus I guess, the 53% you reported this quarter. So just hoping you could talk through that.
Bonnie Herzog: Behind this may be just a phasing.
Bonnie Herzog: Yeah.
Bonnie Herzog: Sure happy to do that so of course, we are facing a particular year in 2025 with zain in the U S. Because it's going to be a mix of continuation of strong growth and strong consumer offtake growth of course, when you look at the shipment be careful and I flagged that in my.
Bonnie Herzog: Our remarks, because last year, we are clearly consumer offtake in Q1, which was much much stronger than our shipment that was the time when the consumer started to empty. The shelves. So we need to be cautious when we look look at the shipment is there are now reflecting the consumer offtake.
Bonnie Herzog: And and take that into into account and next to the strong growth that we expect from consumer offtake and we have a very dynamic categories, 30% to 35% growth. Despite the fact that the leader Zane was constrained we're going to add on top of that this replenishment as restocking.
Bonnie Herzog: I'm not going to speculate on exactly what it is but it's certainly few tens of millions can and we have started because of this good performance on production that I explained to.
Bonnie Herzog: To send more product to first of all wholesalers distributors, and then says they're going to start to ship to retailers. So it's going to be a very gradual process are there are still of course, very Ah I would say material situation of out of stock we're going to continue the replenishment.
Bonnie Herzog: In the second quarter may be part of the third quarter as well and we've been explaining that we explained we are expecting to be back to a normalized situation. If I may say, therefore, no more material out of stock situation in the third quarter of 2005. So in term of shipment that is going to be.
Bonnie Herzog: This profile through the year of <unk> and accelerating growth for our shipments that's what we expect.
Bonnie Herzog: Which is going to reflect first the consumer offtake that is going to accelerate and then of course, our replenishment impact it is going to decrease as we.
Bonnie Herzog: Replenishment, if you want so it's a particular profile and the replenishment. If you want to some extent is going to <unk>. The fact that there is a growth in the consumer offtake that we're going to experience for the year.
Speaker Change: Okay. That's helpful. I appreciate it and then just maybe a second question for me on margins you delivered robust margin expansion in the quarter. So how should we think about the drivers of continued margin expansion for the remaining of the year I guess, especially in the context of what you mentioned.
Speaker Change: As it relates to continued SG&A growth and the investments et cetera.
Speaker Change: And then.
Speaker Change: On the back of that you know I know we've talked about this before but how should we also think about the margin gap you're seeing between your combustible business and then smoke free products today and then.
Speaker Change: The key drivers of further expansion of that gap over the next couple of years. Thank you.
Speaker Change: Luke.
Speaker Change: Obviously, we are very pleased with our margin expansion. That's something we are targeting 425, and we are very positive about our expectation we have a clear illustration in Q1 of the strong performance in term of margin expansion clearly our smoke free.
Speaker Change: <unk> are driving this first and foremost is margin expansion you have an impressive $6 70 basis points.
Speaker Change: <unk> expansion in Q1 for our smoke free business.
Speaker Change: Don't take that as a reference for the full year, but that means that we are now above 70% gross margin rate for the Smokefree business. It's.
Speaker Change: <unk> five percentage points higher than combustible. So as we are growing of course, very fast our smokefree business faster than convertible.
Speaker Change: That means that we are benefiting at the margin level of a very positive mix evolution and we believe that this difference of $3 25.
Speaker Change: Should stay between smooth.
Speaker Change: <unk> pre and convertible I'm, not saying, it's going to stay exactly the same level, but we're going to keep a very material difference between the two and we're going to continue to benefit.
Speaker Change: From this positive mix effect.
Speaker Change: For the future.
Speaker Change: A number of drivers that will continue to play on the margin for our smoke free portfolio.
Speaker Change: There is of course, the mix coming from <unk> in the U S is the best in class gross profit margins. So when we grow fast in the U S that has a positive impact you have all the scale impact that we are generating on Iqos and you should look at the last two to three years, you've seen on a very consistent basis, a gradual improvement on the margin.
Speaker Change: On Iqos issue certainly magnified in the first quarter, because we have less sale of device last year, we had big device sell in Japan as we were launching into March so that is helping the margin, but fundamentally we are benefiting from scale impact productivity and a better performance from device.
Speaker Change: And then we have some pricing that youre seeing 3% on consumable.
Speaker Change: For our smoke free business. So we are increasing prices as well and last element, which is more marginal today, but we're also improving the margin on <unk>.
Speaker Change: So that is also I think so as you can see we have many positive driver behind our smoke free business and smoke free business is a driver for of our first driver for margin improvement. Okay. Perfect. Thank you so much I'll pass it on thank you.
Speaker Change: Thank you.
Speaker Change: Yes.
Speaker Change: And our next question comes from Matt Smith of Stifel. Your line is open.
Speaker Change: Hi, Emmanuel Thank you for the question.
Speaker Change: Good morning.
Speaker Change: If we could first talk about the guidance outlook with the strong first quarter and now the second quarter guidance. The first half EPS growth on a constant currency basis as a few points above the high end of the full year outlook can you talk about the factors in the second half that we should take into consideration with the constant currency EPS growth outlook implied via a couple of points.
Speaker Change: Below the full year average by my math, just the shape of the year there.
Speaker Change: Yeah.
Speaker Change: Sure, Matt happy to take care to take that one.
Speaker Change: So yes, we are saying that we expect to be.
Speaker Change: Well positioned versus the overall bracket for the year in terms of revenue growth, we expect to be a bit above on why.
Speaker Change: No you know that these are the traditional difference.
Speaker Change: You can see during a year between H, one and it's true you made some comparison basis.
Speaker Change: Can play there is.
Speaker Change: Potentially some phasing on the are we going to position SG&A. So there is nothing to be read I think in terms of change in the underlying business between each one and its true. These are more of a number of things our position in terms of shipment.
Speaker Change: Through the year in terms of investment.
Speaker Change: But I would say, we expect a strong year through the suites.
Speaker Change: As we go through the quarters and we've been flagging the fluctuation that we we expect our in some area and acceleration for Iqos in the second half in term of IMS, but that's not going to initially translate into shipments as the phasing for shipment can be a bit different so.
Speaker Change: Again, I think we expect strong strong momentum through the year for our smoke free portfolio.
Speaker Change: We've been saying the fact that on convertible we are positive in volume in Q1, but for the year, we expect a low single digit decline so that could mean that the.
Speaker Change: The second part of the year, we will have more negative.
Speaker Change: <unk> for a four hour our convertible, but clearly we expect strength through the year.
Speaker Change: Thank you for that and as a follow up I wanted to talk about the IMS growth you referenced for Iqos.
Speaker Change: You had nice growth in the first quarter I think it was about 9%, but if we look back to the fourth quarter. It was around 13% and now you're expecting a reacceleration of IMS and Iqos IMF growth.
Speaker Change: Ross the remainder of 2025, so can you talk about some of the underlying benefits too.
Speaker Change: S growth re accelerating across the rest of 2025. Thank you I'll leave it there.
Speaker Change: Yes. So indeed 19, 4% was was in line with our expectation they are.
Speaker Change: And Europe was below the average with our with the turbulence coming from that.
Speaker Change: A flavor ban implementation in Europe.
Speaker Change: We believe that the impact will be.
Speaker Change: Lower in a in a in extra as we go through amortization and therefore, we expect in <unk> and exploration is as I mentioned in the IMS growth in the second half in Europe.
Speaker Change: But otherwise we are expecting.
Speaker Change: This 10% to 12%.
Speaker Change: Adjusted EPS growth through the year. So we expect overall continuation of a nice double digit growth Q4 was very strong after you know.
Speaker Change: A quarter that had been weaker last year. So you can have some trading through the year, but after this Q1, which was in line with expectation.
Speaker Change: We expect continuation of very good growth in Europe in Japan, and I took some time in my remarks to talk about the other markets, where we see also some very promising growth in that in several markets.
Speaker Change: Thank you.
Speaker Change: And our next question comes from Eric <unk> of Morgan Stanley. Your line is open.
Speaker Change: Great. Thanks for the question on <unk> income.
Speaker Change: In terms of our full year guidance, you did raise the xen shipment volumes.
Speaker Change: And obviously, that's a very high margin product you kept the.
Speaker Change: Constant currency EPS guidance the same you.
Speaker Change: Delivered some very very robust.
Speaker Change: Expansion in the first half.
Speaker Change: Are there any specific offsets that you could point to that cause you to.
Speaker Change: To reiterate the guidance rather than flow some more through to the full year or is it more of a factor that we're early in the year and there is obviously a lot of macro and geopolitical uncertainty.
Speaker Change: Thank you Eric for the question. So indeed, we were targeting a year of very strong growth in performance and I think Q1 is flagging. The fact that we are well on track to deliver a year.
Speaker Change: Year of strong growth.
Speaker Change: So we are confirming that we we expect a year of.
Speaker Change: Very strong growth across the board.
Speaker Change: For PMI.
Speaker Change: What we've seen in Q1 is indeed very reassuring on the fact that we're going to deliver this full year.
We are.
Speaker Change: Raising the guidance for the volume for <unk> in the U S. By on average 20 million cancel yes. It is.
Speaker Change: He is a very profitable brand, but not to the extent to dramatically change.