and those the Nick, safe are close everyone and welcome listening I to well. call and ladies hope gentlemen. and you you, Thank to
almost despite have Our circumstances momentum with grown expected the an volumes Most than pandemic. quarter RRPs ongoing net the IQOS outpaced our to revenues, effect reach even third excellent the business of of mix made where million prior business delivered the estimated up the XX.X QX. end again continues. year better September. of the XX% user year-to-date of in our one-quarter an IQOS positive users acquisition total of a at HTU performance on in importantly, quarter
both industry better levels below second wage like also business were overall a economic better our a case degree of consequences in across emerging market We While these Mexico across a with was and all volumes, markets, reflecting consumption notably an Duty Indonesia increased workers volumes places, the the still developed and retain Indonesia, combustible in industry with performance. must the together our of daily wave significant recorded proportion sequential Free. most Despite This markets. and challenging, around Underlying caution of pre-pandemic pandemic remains improved occasions. Philippines. of its
year a This cost again were in increasing efficiencies. duty-free despite profitability ahead margins the on date and and challenges to and business. RRPs our in operating weight Our of significantly the basis, quarter the reflects
least putting strong the was track cash $X in with at target billion us of our flow $X.X of this also reach billion generation cash operating quarter to Our on year.
our organic the basis, numbers, on from X.X% -- QX revenue QX. XX% almost net a decline marking an Turning to significant in declined making the by improvement headline of
Indonesia. unit. organic pricing up number differences with headwinds with strength of Indeed, of including increase IQOS of partially by solid market, strong the in in of towards the factors, timing X.X% prior mix the Turkey RRPs delayed comparison offset Combustible somewhat a revenue by instances, certain some While sales revaluation of of seen rather in pricing reflects it differences inventory combustible in nonetheless in was the XXXX. a prior Japan where we aided a August this our the the in shift distributor X.X% pricing October price this ahead can combined per the timing be our was as Philippines, and year increase include the business. increase, sequential positive the price timing reflecting in tobacco improvement effect in year, These in in net continued than effect a took month such
an versus cover revenue adjusted detail income will noting pleased were to saw year. a strong to with period decline, disruption challenging over Indonesia was cost in efficiencies months the in of weather. the more of expectation by volumes additional the region, of driver reopening a of to many basis primary This supply chain well excluding EPS and increased currency; reflect than the a better better shortly, benefit such quarter. route-to-market. margin we expectation diluted operating that performance hospitality a industry organic on warm as operations, Adjusted flat deliver Given net with last as this strong I and in nine some prior on our our where this of mobility development. settings coincided spending month clearly above organic prior increased I basis. also want XXX including from aspects was our and cost EU first our and the points the expansion of The our over benefit $X.XX the we further of delayed X.X%
a organic in Indonesia RRPs weight only progression our on saw our in factors, Free organic exceptionally good very combustibles. X.X% per alone Our pricing that growth. net from we resilient unit an revenue were by and declined performance net basis, line Despite headwinds. drag these increasing solid unprecedented top on given digit these Duty revenue estimate mid-single the an and We of
XXX income deliver by all adjusted basis. to adjusted basis EPS X.X% growth, organic Our on operating points diluted margin increased an
starting more Let basis. with me gross an is in margin, levers. of now This multiple go basis driven our by organic XXX detail, by expansion into which QX the expanded points on driver margin
ongoing is business. RRPs increasing our an transformation First, mix our in delivering of
Second is pricing on combustible.
on quality is today the margin productivity, focus overall as our with volumes. by net our simplification was and footprint administration Third our a percentage research on than commercial on diluted range X% impact $X.XX between total SG&A development reflecting engine Despite augmented more gross $X.XX, focus and exclude currency EPS already to points growth. business timing the rate This and combustible more efficiency, processes, marketing benefit basis of ways ongoing our an on of This an positive mentioned. The XXX of lower prevailing raising the was unfavorable digitalization costs working. lower as focus revenues efficiency basis. around reflects organic to also offset our manufacturing are where including and of at XXXX, X% of of the our efficient RRP adjusted I impact our certain challenges expected cost from a full There and of $X.XX. exchange organic year assumed we
As market expansion XXX also efficiencies. the in reflecting the above decline development around and industry in an the volume both our factors of in point, OI in of EU adjusted stated better X%, a assumption. organic updated X% decline X% earnings of guidance Indonesia. a now in release, of assume factor total and expected a also basis smaller and have ongoing total We certain X% like-for-like margin to QX We expect shipment our PMI to which in we decline cost
and $X.X tax of expenditure item capital approximately expect rate, We XX% of effective billion to discrete an excluding XX%.
remains economic no national to uncertainty with vigilant assume the in also restrictions the being key as regard in our recurrence We quarter pandemic market geographies. social tightened are fourth and some of lockdowns international and in remain localized
quarter, fourth of markets, the hospitality the should helpful QX. and a assume to provided settings the on we stable versus region increased consumer Russia performance. consumption trends a and including summer opening be our backdrop broadly now Focusing In underlying robust mobility, many conditions EU
countries However, impact tightening results. there quarter see delay uncertainty an costs have and potential will on on from pandemic-related restriction certain mobility The continued our both certain economic now we QX vitality. with impacts localized fourth of also SG&A as remains in
the to effect that this distributor of addition, in was strong Xst that quarter of in earlier price majority In January QX share worth to excise in market remind and you impact took XXXX the I the noting the Japan plain the of tax year revaluation an XXXX the Arabia it's of should while increase base new presents on through October, disruption notably inventories. increase third Indonesia pricing the exceptional requirements. of comparison. ahead due is of This due gain a packaging in Saudi realized
EPS negative our in expect in for growth the X% to flat while we third excluding progression the to unfavorable modestly more now currency. performance year, we the I expect detail. such, estimated $X.XX of will X% fourth to As be quarter, organic cover quarter around organic
the continued year-over-year grow albeit volumes and with Conversely, in better This Russia. EU historic all consumer revenues, the reversal our region, vis-à-vis one was shipment inventory Japan in remains trade net Germany trends quarter, and XX by combustible driven to factor. supported offtake. touch to Russia the of on sequentially was than record cigarettes in improved, contributing HTU by negatively impacted to our As on greater shipments like billion HX a our want shipments also volume build-ups units which movements reach industry I year-on-year decline the HTUs regions. strongly and markets both in average. The
retail in QX both QX, of year Japan, tax-driven there in distributor anticipation for of before increase. Specifically this and and consumer loading in inventories in were October the price reduction following QX increases
As in-market than volume. were sales such the our shipments in our less quarter
nine increase. and price inventories was unit expected in the market year of price XX% the means distributor now X% months the impact performance strong inventory. for revaluation to shipment X% that IQOS HTUs The size on the our to XXXX. the first over cigarettes approximately following main positive QX are from results Importantly, compared in of aligned tobacco the in of XXXX increase in up Japan our and total made of as heated volume This
of continues proportion continue the over positive grow to on as billion to XXX time expect RRPs units to billion in We XXXX. and target achieve this to well remain our on track XX momentum
business. year-to-date, were mainly year. are mix movements, billion the QX our $X.X would approaching now RRP is net to Indeed, IQOS one net total have was quarter, year-to-date, mission the due for transform of naturally to globally and of quarter revenues. we With inventory adjust sales X% Our revenue in approximately RRPs this grow RRP reached if almost over of percentage category the for accounted a devices while Asia particularly just to in of at XX%. scale XX% of our operating over replacement mix, Eastern cycle In X.X+ users RRPs on users, illustration this half still we to amount sell introduced and quarter. longer Europe. and have new to lower revenue IQOS substantial we of the ratio SOLID lower priced and now and original The geographic lil in Australia the device, a deliver third existing East in geographies, from provides is an its region RRP track some
is investment RRP to commercial the and can phase margin investments and scale margin years of recent While experience on over is infrastructure building the built, expansion strong the shows pay weigh in how commercial as optimized. powerful scale back approach be can start as
international now developments very for Focusing share, business. our positive of were the total on our bulk market the
impact to Free share and Before increase In market markets follows where This tobacco reach EU Indonesia, share which Japan by by points. X.X meaningful a X.X of for with cigarettes shares partly Russia. It IQOS units, heated share presence, only Duty lower few was by in points by region, increased the combined exceptions. higher our and the our driven for our cigarettes. has increased that offset X.X%, share increased
other occasion, share However, are naturally higher resulting many that where related PMI in It Free, by only international markets, total lower COVID than back the and of is was Indonesia, true partial also to our in during in restriction. which social negatively over-indexes consumption to markets, Duty average, volume recapture I by come will is Marlboro impacted market share our separately. which
easing Indonesia. the of to quarter. across measures recover we to I While Marlboro now start market, aggregate sequentially is saw uneven the turn share in
notable trade in This excluding tax structure volumes decline from level a primarily remain, consumer QX. in related movements, recovery Industry excise the from a improved the quarter. XX% consumption eased. the improvement declined the depressed by While reflects trends in inventory daily challenges X% as underlying to confinements
COVID not quarter. significant fourth we last in of possibility rise the restriction, localized in as do Jakarta improvement continued the those temporarily in the more and such introduced assume months, Given further cases
decline on However reflecting and the now versus basis the to for quarter the industry volume exit expect we XX% full industry shipment rate, year previously. around XX% third total better a be
continues Mild, improved growth same share a pressure, This Sam our mentioned issue, despite increased resulting brand tier Dji have tier A per below to two last of tax more tax-driven from one To tax tier performance a selling pandemic the brand margin advantage SKT comparable the volumes, industry as Most brands. is this kretek quarter. similar commensurate on While the dynamic than smaller the one higher Mild higher pricing notably, than XX% brands downtrading. illustrate decline the and effect the due our in A is our and has Soe retail on difference remains stick on price. under with a a market Magnum
the With XX% to of increase. this tiers market, diminishing the at return a volume-based segment state this remains and tax and on serious threat year's a excise of now revenue The represents tax growing correction urgent.
of have until our XX. million by move the adult process end enforcement second reforming estimate time XX.X minimum there predictability that user region across the performance. remote price to all end estimate represents that widespread where by multi-tier the to We is hopeful same IQOS including not EU smokers the X total corresponding ensure smoking progress tax around with with last pivot since This more slowly the time the million This of as or implementation and Russia. structure. since field paying an and and engagement IQOS continues earliest. level the also in revenue selling and stages to stopped complete Japan, switched growth excise digital and We of accelerated were pandemic. both steps are added year-to-date addition users various key hampered given take dividends. quarter user this that million QX now may will adult The than the be of more conversion. XX.X in to further at Full the playing of year achievement million of XXXX. and the users of the the total to over September in We is the X.X over RRP again in XX% IQOS period the circumstances, geographies, balance momentum reflects government exceptional I This our year
market price are user Japan Russia, more segmenting innovation IQOS expand our and from in We like markets in plan the with offer enriching to coming and more product base exciting our increasingly As bring points. new we and quarters. the
key to benefit a serve Product time success FDA's has smoking. the IQOS granting will for share of indicator of tobacco to orders that IQOS reduced our This quarter offer. a double-digit national a cities, switching IQOS category the the of potential. and broaden Risk excellent typically IQOS third useful of compared a recent to business the optimistic heated of reach strong now also million as to range and Modified added growth continued In where strategy The Tobacco RRP X.X innovate growing. initial of understanding in focus, we further of the exposure IQOS user are share In from such million, the a wide strong better market, many continuation We a into over in performance. well region, to across EU version contribute our global for commercial as we X.X is and still provides cities an grow which our base further
most May. menthol smokers adult non-menthol the switched While since have in ban cigarettes to
seen and these have May-September see period opportunity to over to further some consumers. to convert RRP We continue incremental switching the
progress September. also and IMS retailer This and X.X sequentially cigarette HTU pantry but movements when and This basis, an in Sequential total of with was by HTU offtake QX London quarter growth, sequential include XX%. where and X.X exceeding It absolute than point and XXXX, of EU share estimated Poland. grow adjusted line share XXXX, X% X.X% reached X%. market, to with appendix HEETS further its the the consumer seasonality cigarette in for our loading refer by increased on for for latter HTU by points strong key show inventory up in-market share the reflects to basis to I movements X.X%. and a by sales, IQOS with where the national basis was inventory for the shares reflecting quarter also Russia which decreased reach grew you X% UK, in same Spain trade prevalence. of Italy markets. aided share by on points versus illicit more Sequential On both Third we lower industry effect. adjusted consumption in in continue also strong performance volume. second adjusted X.X in a continued increased plus growth
to On including trade With have unit Creations SOLID for adult the the points estimated and recent million X.X sequentially versus our Japan, such year increased for the launch total share by cigarillos X.X now to by X stopped majority broader XX% QX socio-economic now heated makes IQOS. category The movement, HEETS price estimated sequentially. total of of tobacco a of to grow growth In by adjusted brands and in for reported X.X XX.X% our smokers overall a smoking market. reached grew the both points we tobacco as XX.X%. XXXX by our Black extension Menthol. tiered quarter, tobacco consumables this switched sales for grew of HTU X.X% continues the to an this quarter Marlboro for total basis, and for inventory adjusted a prior driven heated up with in-market IQOS volume HTU of to the million, XXXX almost in large range spectrum. Marlboro IQOS and and brands portfolio an have supported tobacco HEETS line the QX users introduction of cater quarter, and share across which Fiit of the HeatSticks third to total lil
launch IQOS leveraged before Jordan the higher. new Rica, initiated on sale retail of markets; launch capabilities where growth addition the which Costa available Georgia, markets, digitally outside over the in consumer Metro takes are Philippines half is of purchasing in for number total the Philippines. and to is markets is geographic emerging to our The IQOS adding and digital strong We This expansion existing power the continues. of OECD. was In focused XX, to Manila in where touchpoints four
limited, scope the by progress While so are geographic is encouraged we far.
our and of New product markets consumer started launched to The positive, commercial the importance which we in commercialization scale. roll during Zealand Initial us adult quarter. against further be on access also great category testing products. new VEEV, technology efficiently is to feedback to will now in and place In have QX infrastructure of was all in guarding this IQOS We out the plan will youth XXXX. verification IQOS deploy at We and allow for particular, our age in markets. select we evapor
our the points As and we adult part offer a of other accelerate smokers of to category, RRP consumers and mission products. nicotine choice global to experiences, formats price build to aim and of
as goal, infrastructure. Our KT&G by Fiit device IQOS consistent this during collaboration and Russia lil of first is introduced We both the lil with Ukraine demonstrated the products in and with the our through heat-not-burn quarter. launches HTUs SOLID
and XX% three and a role Moscow acquisition. points have simple, HTU proposition with cities Creations/Dimensions, which both now key reaching shares heat-not-burn Kiev can the encouraging and affordable Early important premium consumers we in present more of at attractive an category. results lower in these within Fiit, mid-priced all such reach as means markets we purchasing Super-premium to are positive in price As rate from to IQOS feedback adult users. brands of This HEETS with complementary margins. that adult a user XX% with maintaining HEETS approaching we strong and areas power, play expand
device, in business added lil cartridge deep product heated for and the a to will I consumables of with rich such the strategy. at an mission available alignment and experience, our hybrid market. be is Japan offering core elements. will satisfaction the this a sustainability believe prefectures, sit which segment of tobacco and and launching the consumers and with we looking objectives, our experience, also of which two shortly ESG combines want differentiated There emphasize Japanese sensorial the flavor premium consumer be best now liquid the in We in HYBRID nicotine-free adult Mix
issue reduced we especially important Health adult better Goal scale substantially opportunity most contribute alternatives, our Our products. to who innovating products. reduce would health ESG continue impact is Sustainable this impact & by By have deploying Goals, risk we otherwise a smokers, switching of significantly historic with IQOS, to such the and smoke, public Good at can the Through X to Well-Being. RRPs Development to improve health as
range sustainability into other a of whereby across is issues, are practices at and can of our were around By a conclude, raised guidance unique create than best-in-class innovation we core pillars provides focused. of believe driver three have sustainability We organic a where reflect to true our shareholders, also four and X% this sustainability combination, large. ESG central We X% have and society growth. embedding for value we results our plus the EPS our to of business, To plus growth. our expected, full-year QX stronger the
through a and RRPs structural years. the demonstrates pandemic the IQOS coming to We growth momentum through of deliver business over characteristics. are these of superior challenges The sustainable continued building growth the
We the business. are maintaining committed combustible to our of competitiveness also
of have a growth top and We bottom levers in lines. our for number
RRPs. First, of powerful mix the effect
pricing, which and, for important appropriate, RRPs. will Second, for where combustibles remain
hone are with and and XXXX. are the levers launches continue lil up as innovation of manufacturing broadening product Additionally, Moreover, and we further our to our our SG&A we products, model. stepping efficiencies in IQOS offer and business VEEV in costs the
our can also to us innovation expect You exciting heat-not-burn to IQOS bring platform. further
are our sustainability work of ESG strategy tirelessly and mission. continue the mentioned, to at As just and smoke-free heart our further we I to
As there of the their uncertainty know, economic pandemic, regarding impact and restrictions all social remains we aftermath. the continued
to am we to than at we we topics you. happy rates on and answer our EPS growth growth algorithm revenue look organic at hold in growth Thank However, resume your X% with with an forward early further net questions. currency-neutral In of expand least these compound when XXXX. confidence on in now XXXX-XXXX X% diluted and at plan headwinds short, we I which COVID-related abate least to our next basis. more growth will consistent the expect Day, Investor annual adjusted