“We do not expect a meaningful change in the structural trajectory of the category, and indeed expect Europe adjusted IMS progression to be broadly in line with the group growth rate in 2024.”

In context

“s consumers adjust, as well as on trade inventory levels. Indeed, adjusted IMS volumes continue to exhibit very good sequential growth and reached a record high 12.4 billion units on a four-quarter moving average. This reflects double-digit year-on-year progression of plus 13% in Q4, despite the lack of growth in Ukraine. We expect the remaining EU markets to adopt the characterizing flavor ban in 2024 and estimate a full year consumer adjustment impact of around 2 billion units on both shipment and IMS, representing less than 5% of regional volumes and less than 2% of total PMI. This is consistent with other past flavor restrictions, such as the EU ban applied to combustibles in 2020. Based on the initial data from markets that have enacted the ban, our fundamental view remains the same. We do not expect a meaningful change in the structural trajectory of the category, and indeed expect Europe adjusted IMS progression to be broadly in line with the group growth rate in 2024. Europe is also an important geography for innovation. LEVIA zero-tobacco HTUs were launched in the Czech Republic in mid-October through limited channels with an encouraging initial response. We plan a broader Czech rollout later this month and further market launches this year. In Japan, the heat-not-burn category now represents close to 40% of the total industry, with IQOS driving its growth and reaching over 8.5 million adult users. In Q4, the adjusted total tobacco share for our HTU brands increased by 3.1 points to 27.6% with off-take share surpassing 34% in Tokyo. Adjusted IMS volumes increased by 14.5% year-over-year for 2023 and 13.4% in Q4 alone, reaching a record high of almost 10 billion units on a four-quarter moving average. Such impressive growth in a market with already hig”