“Given our expectation for a strong full year profit delivery and cash conversion, we are raising our forecast for operating cash flow to around $11.5 billion at prevailing action rate and subject to year end working capital requirements.”

In context

“xcellent H1 top line in Amazon and margin progression, we are raising our forecast range for organic operating income growth to plus 11% to plus 12.5%. We are also raising our currency neutral adjusted diluted EPS growth to plus 11.5 to plus 13.5%. This includes a slightly improved effective corporate tax rate of approximately 22% to 23%, based on the latest assessment of tax dynamic and market mix. We are still reviewing the implication of the OBBB Act US tax reform. In dollar terms, we expect adjusted diluted EPS growth of plus 13% to plus 15%. This includes an estimated ten cent favorable currency impact at prevailing exchange rate with favorable earnings translation from the broadly weaker dollar partly offset by transactional impact due to currency volatility which I covered earlier. Given our expectation for a strong full year profit delivery and cash conversion, we are raising our forecast for operating cash flow to around $11.5 billion at prevailing action rate and subject to year end working capital requirements. Project capital expenditures slightly above our prior forecast at around $1.66 billion primarily due to further international ZYN capacity investment with CapEx spend almost entirely focused on supporting the growth of smoke-free. With regard to our balance sheet, we continue to target further deleveraging in 2025. Placing us on track for an our target ratio of around two times by the end of 2026. As mentioned last quarter, we are a global company with broadly diversified production and a worldwide supplier network including an established US manufacturing base, and we believe we are well positioned to mitigate potential supply chain challenges. While the situation is volatile, we do not currently anticipate anticipate a material impact on our business from recently introduced or discusse”