“We expect higher organic SG&A increases in the remainder of 2024, notably reflecting investment spend phasing, which was favorable in Q1.”

In context

“better-than-expected evolution of combustibles. These factors, combined with productivity savings, significantly outweighed the unfavorable technical dilutive impact of third-party manufacturing in Indonesia, which equated to 30 basis points in the quarter. For SG&A costs, currency-neutral growth of only plus 1.4% drove 220 basis points of organic margin expansion. This benefitted from our resource allocation and prioritization programs, including the delivery of approximately $160 million in gross cost efficiencies across COGS and SG&A towards our $2 billion target for 2024-2026. Although the Q1 margin impact of SG&A cost evolution including currency was small due notably to Egyptian Pound transactional currency, we continue to target SG&A progression below top-line growth for the year. We expect higher organic SG&A increases in the remainder of 2024, notably reflecting investment spend phasing, which was favorable in Q1. The combination of these factors powered a remarkable plus 370 basis point expansion in our organic operating income margins, and plus 90 basis points including currency. This exceeded our expectation and we are now raising our full-year operating income growth outlook, as I will come back to. Taking another lens on adjusted operating income margins by geography, we see broad-based global momentum with all regions delivering strong organic progress. In dollar terms, margins expanded in every region except the South and Southeast Asia, CIS, and Middle East Africa region, mainly reflecting the transactional currency impact of the Egyptian pound and the technical dilution in Indonesia. Indeed, excluding these factors, this region grew margins at a very similar rate to the group. Moving to IQ”