“this exceptional start to the year sets the stage for us to deliver significantly better-than- expected 2024 currency-neutral growth, and robust growth in U.S. dollar at prevailing rates.”

In context

“% of IQOS volumes outside Russia. ZYN also continued its considerable growth in Q1, with U.S. volumes up plus 80%. Importantly, this top-line performance translated into strong operating income growth and margin expansion, both organically and in dollar terms. This was notably driven by accelerating profitability in both our IQOS and ZYN businesses, in addition to improving combustible performance. We faced higher-than-expected currency headwinds in the quarter, primarily due to the devaluation of the Egyptian pound. We are taking mitigating actions including additional pricing and accelerated cost initiatives, which allowed us to deliver Q1 adjusted diluted EPS above our prior expectation, despite these pressures. While the prior year quarter was favorable for certain growth comparisons, this exceptional start to the year sets the stage for us to deliver significantly better-than- expected 2024 currency-neutral growth, and robust growth in U.S. dollar at prevailing rates. Turning to the headline numbers, very good shipment volume growth of plus 3.6% supported organic top-line growth of plus 11.0%, or plus 8.6% including currency. This reflects continued excellent IQOS and ZYN momentum as well as strong combustible pricing. Operating income grew by plus 22.2% organically versus a softer prior-year quarter, notably driven by gross margin expansion and a deceleration in SG&A growth. As a result, our organic OI margins expanded by plus 3.7 percentage points. In dollar terms, adjusted OI grew by plus 11.3% and adjusted OI margins expanded by 90 basis points. We outperformed our Q1 adjusted EPS outlook due to three main factors. The first is the net revenue and profit impact of better volumes following the industry-leading performance of ZYN, the strong shipment”