“We target an additional $2 billion over the next three years.”

In context

“winds in H1. As flagged in prior quarters, full year margins include a 40 basis point headwind from the accounting treatment of third-party manufacturing in Indonesia and Ukraine, primarily reflecting the Indonesia excise tax gross up of around $250 million growth in both net revenues and cost of sales. While headwinds in combustibles have not fully abated, our smoke-free business is delivering excellent profit growth, and our organic results will include the strong contributions from Swedish Match going forward. We successfully mitigated inflationary pressures and supported investments with efficiencies. Across our total operating cost base, we delivered an incremental $100 million in gross cost efficiencies in Q4, and $2.2 billion for 2021/2023 overall, surpassing our $2 billion target. We target an additional $2 billion over the next three years. These positive factors allowed us to deliver very strong currency neutral adjusted diluted EPS growth of plus 11%, ahead of our prior expectations. Adjusted diluted EPS of $6.01 includes unfavorable currency of $0.63, primarily reflecting the Japanese yen, Russian ruble, and specific Argentine peso dynamics I just explained. We include a slide in the appendix to this presentation with more detail. Focusing now on volumes. We comfortably achieved a third consecutive year of shipment growth driven by a 15% increase for IQOS HTUs, in addition to a resilient combustible performance. Our smoke-free volumes made up over 20% of total PMI in Q4, and with continued mid-teens or better growth expected here, we are very well-positioned to continue growing volumes over the mid and long-term. 2023 HTU”