“The incremental phasing impact was around 1 billion units and was primarily related to Red Sea disruption. While uncertain, we assume this will normalize in the second half of the year.”

In context

“e outperformance was driven by underlying business dynamics, which bodes well for the remainder of the year. Indeed, we delivered adjusted diluted earnings per share of $1.50, representing plus 23.2% growth excluding an unfavorable currency impact of $0.20. This includes $0.09 from the devaluation of the Egyptian pound, including a transactional impact of $0.06 primarily related to the balance sheet remeasurement of foreign currency payables. With increased liquidity in the Egyptian pounds, we are now reducing our balance sheet exposure, and this should be complete in the coming weeks. Focusing now on volumes, our Q1 HTU shipments of 33.1 billion units exceeded our outlook, with robust underlying growth across geographies and a higher-than- anticipated timing impact of shipments to Japan. The incremental phasing impact was around 1 billion units and was primarily related to Red Sea disruption. While uncertain, we assume this will normalize in the second half of the year. As mentioned previously, we believe the best indicator of underlying HTU growth is adjusted in market sales, as the closest metric to consumer offtake. Adjusted IMS volume grew nicely by plus 12.5%, including the expected impact from the characterizing flavor ban in Europe. We continue to see strong IQOS momentum, with excellent growth in Japan, robust underlying fundamentals in Europe, and a growing contribution from newer markets such as Indonesia. We continue to target plus 14% to plus 16% adjusted IMS growth for the year, with around plus 10% growth in Q2 followed by an H2 acceleration driven by the timing of commercial programs, ILUMA uptake, newer markets and a less demanding prior year comparison. Total smoke-free volume growth of plus 22% includes the impressive expansion of our o”