“We continue to target combustible gross margin expansion for the year in organic and dollar terms as cost pressures, including the impact of the EU single-use plastics directive, are more than offset by pricing and ongoing cost initiatives.”

In context

“of the business producing excellent results. Smoke-free net revenues and gross profit grew organically by plus 16.8% and plus 20.2% respectively, driving 200 basis points of gross margin expansion. This reflects a robust IQOS performance in the quarter including manufacturing productivities, as well as the continued accretion of ZYN and a small but growing contribution from VEEV. Smoke-free gross margins were more than 450 basis points higher than combustibles in Q3 and more than 200 basis points higher year-to-date. Combustible net revenue and gross profit growth accelerated to almost plus 9% organically. Combustible gross margins improved by plus 10 basis points organically and by plus 20 basis points in dollar terms, marking the second quarter of expansion following a challenging 2023. We continue to target combustible gross margin expansion for the year in organic and dollar terms as cost pressures, including the impact of the EU single-use plastics directive, are more than offset by pricing and ongoing cost initiatives. Focusing now on volumes, we are well on track for our fourth consecutive year of volume growth. Our business delivered a remarkable performance of around plus 3% total shipment growth both in Q3 and year-to-date, with all categories and all four regions growing over both periods. Q3 HTU adjusted IMS growth of plus 14.8% reflects the underlying dynamism of our IQOS business, with a continued strong performance in Japan and a reacceleration in Europe as expected. Q3 HTU shipments of 35.3 billion units were at the upper end of our expectations, with the superior adjusted in-market sales growth compared to shipments due to shipment phasing, as highlighted in H1. Our oral smoke-free business grew Q3 shipment volumes by plus 22.2%, with ZYN powering U.S. growth of plus 41.4% and very strong int”