“In 2023, we expect to grow total volumes for the third year in a row, even before factoring in the excellent progress of Swedish Match’s portfolio.”

In context

“ivers of our transformation accelerate. As expected, SG&A growth was much closer to net revenue growth in Q2, and at a more normalized growth rate with regard to our full year expectations. Indeed, with such a strong topline in Q2, SG&A costs were lower as a percentage of net revenues. While we continue to invest in IQOS and ZYN, our successful cost efficiency programs continue to deliver, helping to finance growth investments and mitigate inflation, which remains a headwind. With $1.9 billion of gross savings realized to date, including $820 million from SG&A, we are on track to achieve our 2021-23 $2 billion target ahead of plan. Turning now to the 2023 outlook, we are raising our currency-neutral top and bottom-line growth forecasts. We aim to be a growth company starting with volumes. In 2023, we expect to grow total volumes for the third year in a row, even before factoring in the excellent progress of Swedish Match’s portfolio. As part of this growth, we are reiterating our targeted HTU shipment range of $125 billion to $132 billion, while we expect a cigarette volume decline of 1.5% to 2.5%. We are increasing our organic net revenue growth forecast to 7.5% to 8.5%, reflecting the continued momentum of IQOS, the resilience of our combustible business, and the ongoing excellent growth of ZYN, which we expect to contribute positively in Q4. We expect strong organic operating income growth in the remainder of the year to support H2 margin expansion despite the headwinds previously mentioned and certain technical impacts. These relate to the increased use of third-party manufacturing in a few markets, such as Indonesia and Ukraine, and the related growth of the below Tier 1 segment in Indonesia I already mentioned.”