“Importantly, with the forecast full year increase of around plus 1%, we continue to target our fifth consecutive year of total volume growth as we do for future years as our smoke portfolio continues to drive performance.”

In context

“cludes a forecast decline of 3% to 4% in H2 against the high prior year comparison I mentioned with Turkey accounting for close to half of the decline. This also factor the continuation of decline Europe and Japan as smoke-free product grows strongly and the dynamic in Indonesia and in Egypt where the recovery of the main local competitor is ongoing after previous supply constraint. As a testament to the resilience of our combustible model, we are still targeting combustible gross profit growth in H2. Supported by pricing, and cost efficiencies. For smoke-free products, we anticipate continued double-digit volume growth in H2 including the expected reversal of H1 phasing benefit on IQOS. However, given cigarette dynamic, it is possible that H2 may see modest decline for total PMI volumes. Importantly, with the forecast full year increase of around plus 1%, we continue to target our fifth consecutive year of total volume growth as we do for future years as our smoke portfolio continues to drive performance. Breaking the performance down by category, exceptional gross margin and OI growth in Q2 resulted in impressive first half results powered by our increasingly profitable smoke-free business. H1 Smoke-Free net revenue grew organically by plus 17.3% to $8.1 billion and gross profit by plus 27% to $5.6 billion with plus 530 basis points of organic expansion to reach over 70% gross margin. This is around 4.5 points above the gross margin of combustible at the current category geographic mix. As in 2024, this reflects continued margin expansion for all all three smoke-free category, notably combined with the positive mix impact of ZYN accretive unit economic and pricing on both HTUs and ZYN. Very strong IQOS gross margin expansion reflects the powerful growth and scale effect of this large and”