“While we continue to target gross margin expansion in combustible, we expect this gap to grow over time as we continue to drive profitable growth from smoke-free product, investing in new market Brand building.”

In context

“plus 17% net revenue growth and plus 23% gross profit growth reaching close to $10 billion in gross profit. This drove an impressive plus 330 basis points of organic gross margin expansion fueled by the factors I just mentioned. On the combustible side, net revenue and gross profit grew organically by plus 6% and plus 7% respectively, leading to plus 60 basis point of organic gross margin expansion. Our combustible business is once again contributing positively with pricing and cost efficiency more than compensating for the third year of significant input cost headwinds which we expect to ease in 2025. I would also note that adjusted gross margin for smoke-free product were plus 490 basis points higher than combustible in Q4. And plus 270 basis points higher for the year overall at 66.6%. While we continue to target gross margin expansion in combustible, we expect this gap to grow over time as we continue to drive profitable growth from smoke-free product, investing in new market Brand building. And innovation. Taking a a closer look now at our volume performance, we delivered our fourth consecutive year of shipment growth up plus 2.3% in the fourth quarter and close to plus 3% for the full year. Including our viv e vapor business in equivalent unit This growth was plus 2.4% and plus 3% respectively. Our total 2024 smoke-free volume growth including Viiv was plus 13.5% or 19 billion unit equivalent acceleration compared to 2023. For IQOS, we delivered HTU adjusted in market sales growth of close to 13% and shipment volumes of 139.7 billion both broadly in line with our expectation. Adjusted IMS growth accelerated in h two to close to 14%, essentially in line with our target of plus 14% to plus 15%. This includes dynamic growth of close to plus 11% in Europe with strong momentum a”