“We also expect convertible gross margin expansion in H2.”

In context

“reflects the strong performance of ZYN and the growth and scale effect of IQOS, including manufacturing productivities and an increasing all by smaller contribution from VEEV. Expanding smoke-free gross margin continued to widen the gap versus combustible gross margin, enhancing the very positive mix effect of our transformation. However, combustible gross margin expansion is also a key objective. After seven quarters of contraction, we are very pleased to report plus 50 basis point expansion and gross profit growth of plus 5.5% on an organic basis, providing a meaningful contribution to total PMI profitability. This reflects resilient volume despite very strong pricing in addition to ongoing efficiencies and reduced headwinds on our COGS, notwithstanding continued tobacco leaf inflation. We also expect convertible gross margin expansion in H2. Combined with a very strong first quarter, the year-to-date picture is even more compelling with double-digit organic net revenue, gross profit and OI growth. This is driven by the same dynamic as Q2 with an impressive plus 390 basis point gross margin expansion and plus 29% gross profit growth for our smoke-free business. Our H1 revenue performance again demonstrates the powerful drivers of our financial model with an unparalleled combination of positive volumes, robust pricing and the very favorable category mix of our smoke-free product. As mentioned, volume grew by plus 3.2%. Pricing contributed plus 6 points of growth, including plus 8.3% pricing on combustible and around plus 2% on smoke-free. Smoke-free category mix added plus 2.5 points to the top-line, reflecting the higher net r”