“We expect strong margin to continue in H2, albeit without the device year on year comparison benefit, as we also further expand the presence of Illuma Eye across markets and bonds in Indonesia.”

In context

“oke-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 growing business manufacturing productivities, and a comparison benefit from higher device shipment in the prior year when Iluma I was launched in Japan and other markets. We expect strong margin to continue in H2, albeit without the device year on year comparison benefit, as we also further expand the presence of Illuma Eye across markets and bonds in Indonesia. Converseable net revenues increased by plus 2.9% or more than 5% excluding the Indonesia technical impact. Gross profit grew by plus 5%, driving plus 140 basis points of margin expansion. Despite the financial impact of the Turkey disruption. This includes a robust Q2 with organic net revenue growth of plus 2% and gross profit growth of plus 4.8%. This performance epitomized the resilience of our ongoing combustible business model with low single digit volume declines, robust pricing and efficiencies combining to deliver top line and gross profit growth over time. We continue to target combustible gross margin expansion organically and in dollar term for the year despite slower pricing and weaker volume in H2. The combination of sustained smoke-free momentum and combustible resilience led”