everyone. Welcome new in your role, James. and welcome, you, you to Thank
focus and to all and on of safety Before reiterate our Ukraine by affected the on begin, employees I our above the war in want supporting I families people. their our
and pledge humanitarian continue deploy our support employees. additional for We benefits to Ukraine
and complexities the in chain Russian announced, as as orderly in Russia increase banking operate restriction. As such an exit manner, of to we and continuing the sector intend supply financial market to previously challenges
options the governmental so environment, changing in We to for requirement of certain obtain any regulatory actively increasingly work on and continue transaction. an for rapidly to and approval operating including complex doing the context
business. business future and growth maximize growth of the pro in the user and results impressive by EU IQOS underlying of to launch in top momentum in momentum limitation to QX further in This forma of excellent these quarter was smokers alternatives device smoke-free million, adult exciting the category volumes us our and in demonstrating highlight geographies of continued The demonstrated including In first XXXX and further were quarter revenue share driven volume pricing grew predominantly IMS diverse bottom better-than-expected continue markets growth COVID the Spain. We XX% cigarette net growth developing plus with to revenues plus than to forma combustible, the smoke-free robust constraints more to strong of latest of opportunity Switzerland recovery the impressive net and allows stronger our the of transformation growth continued Japan, Turning line strong compared second HTU of as X.X Maintaining and last X.X% ILUMA strong into category positive Most volume chain in of supply growth. market. the IQOS reflects delivered quarter, XXXX. plus pro acceleration switching and supporting due organic and forma acceleration ease. QX performance the market. sequential while Greece. restrictions highlighted plus shipment adverse by Marlboro three of across by RP world, X.X% XX%. a timing by impact the QX gains accelerate its the leadership to market region, grew QX despite Japan another pro
HX we business strong our the to continue, of the and year. momentum are expect growth from underlying We in outlook an for organic
to both confirming company two smoke-free including financial Swedish of in proposed boost future. profile. Russia an deliver our future year margins. of consecutive XXXX, This addition EPS providing of offer on around shareholders $X, is are a a We deliver our revenues cultural value-creating volumes, to fit, growth compelling with additional growth, Despite substantial as volume currency years status would well to strategic accelerate and terms for further our net diluted The expect set organic Match a of we a adjusted and headwind Ukraine. opportunity now in track and of full
Turning to headline the numbers.
ongoing and Our total in PMI, many reflecting combustible on recovery pandemic both including basis by X% total, X.X% markets net plus Ukraine. revenues Pro organically a X.X% comparison. plus QX by Russia plus business volumes X.X% and the and continued plus for affected IQOS the in grew and growth grew against of forma by of pro a strong forma by the
less As of we due played previously, duty-free role, replenishment indicated anticipated and notably a timing inventories. also shipment of cigarette to unfavorable
grew pricing as on Our X% plus expected global or X% organic pro supply by X.X% of to shipments of despite forma by incorporates manage basis and total total a plus HTU disruption. almost X.X% plus net a we delay excluding pro Indonesia. basis combustible the chain forma Japan This revenue plus on in per unit through
declined pro points income and basis Our QX a adjusted organically forma operating XXX by on total. points XXX by basis in basis margin
as smoke-free growth support the initial in transitory speed communicated of as out channel four main in results, margin growth. match As devices and we reflects roll our replenish HTUs and expected factors: this further to cost to user dilutive distribution impact includes higher the ILUMA QX higher and quarterly This constraint investment the ILUMA first, and portfolio. our of IQOS device expand device ease of and sales reaccelerating
air in expenses. of due million the impact to the disruption, around additional Second, freight chain including Ukraine, in $XX supply notably war
comparison, recovery the productivity war, of by inflation included by global year X% notably Third, savings. around our Despite Ukraine. pandemic direct our substantial to certain exacerbated total and ahead transportation cost costs. which currency-neutral typical line plus growth for and expectation EPS to us a challenging in wages, $X.XX, goods $X.XX energy deliver of sold margin pro and cost Russia of the materials, PMI and cost growth adjusted these X.X% diluted last, prior goods to And top challenges, X.X% forma for of robust enable efficiency and in margin growth plus including driven ongoing
pro by the volumes plus and by in first forma by strong and the pricing. again, net unit forma X.X% total, Pro by cigarette recovery driven volumes organic the at X.X% in now, X.X% for IQOS X% impact X.X% the year plus also half basis revenue per and plus a and and performance of of plus plus total, grew X% positive by HT PMI. on delivered the grew category. Looking of reflecting basis plus on pro total forma of growth growing our a We revenues
organically forma points and factors Our a operating total, basis points in basis mentioned previously. by pro XXX basis income HX XX adjusted contracted driven on margin by the
acceleration plus excellent by diluted $X.XX, shortly. to strong circumstances. performance foresee on will relative pro in adjusted trends robust $X.XX We review Reflecting we expect it Currency-neutral margin in given in our and to an a basis currency-neutral our topic an XX.X% a this X.X% raising plus performance growth XXXX. forecast. to and grew forma HX, EPS for I combustible, total in guidance growth our are With we IQOS expectation momentum, the previous strong better
XXXX, X.X% by we for X.X% shipment forma to achieving another grow growth. volume volume our now to plus First, expect plus total year of pro
and adjusted X% in from to net volume, forecast recovery between inflation, strong and despite Turkey. pro XX zero as With accounting X% organic For are initially X.X% with growth revenue, in the X.X% drag ILUMA ongoing greater-than-anticipated points. forma plus a we the to increasing plus to device unit pro plus plus and cost announced for OI margin previously, expect expansion compared to plus higher hyperinflationary our of between organic we deliver basis narrowing contribution a global forma
XX% impact rates adjusted reflects due the plus include to slide raising outlook $X.XX, yen. further $X.XX the in pro a including and prevailing appendix also are currency euro this estimated of an to of Japanese This We'll notably currency-neutral XX%. on range growth with unfavorable to a We detail forma EPS between $X.XX and our diluted at estimated plus for impact.
Please raising to production convert for initial of units, pro to due of shareholder the regulatory XXXX Russia for to fourth total forma excellent, the deliver we from very notably which the now in in a line of contribution of the of their is Swedish further assumes impact. and approvals. note expect from consumable. Swedish outstanding and billion induction this subject to IQOS the and expected not we target HTUs as volume range. outlook to contribution acceptance which year, Match, our no XX For our and and proposed constraint is HTU volume year shipment combination $X.XX we for our ILUMA forecast currency forecast main adjusted pro is billion close estimated upper quarter production necessary an the $X.XX strong, full our The for representing dynamic XX HTU Match diluted EPS existing momentum Ukraine, cancellation basis similar With previous growth growth including year PMI, assumes the $X.XX, unfavorable half reflecting expect capacity, success Russia full forma to to with production
expect of the We in half continue a HTU HTU improvement first progressive through excellent growth with XXXX. to ILUMA quarters coming the capacity in
and flow further shown forecast prioritizing increase plus headwinds. the forecast billion the launch to QX an full years, capacity as We $XX.X notable billion challenges and A XX%. remains compared business $XX further outlook as around accelerated And ILUMA cash generation in around update We despite our pro our communicated operating earnings through currency operating delivered of in our plan growth year previously. notable as previously to forma Russia includes our robust Ukraine. recent cash cash of assumed with exceptional. from growth are flow HX an is This launches to in market contribution accordingly of
forecast of after revised sheet, growth down one-off balance driven underlying to a and accounting also somewhat capital by and for growth working exceptional While strong flatted full XXXX invest pay in business. higher requirements our demonstrates debt maintain this timing the against year This impact, ability favorable our in inflation underlines and our currency. year
June payment. and of decreased June XX, expenditure at and ongoing debt XXXX, XXXX, billion net compared $X.X of December capital billion both to despite $XX HX Our dividend
policy cash with progressive additional Our commitment is to bring. would look unwavering to forward we combination dividend and flow, proposed Match the the our Swedish
in We expect year also expenditure. around $X capital continue full billion to
outlook Moving now to for the pro half. the second forma
margin to growth. bottom organic line strong We line growth, expansion expect adjusted deliver and OI top acceleration in further
organic IQOS line driven mid-single-digit pro in HTU top billion expect we growth volumes. $XX QX, shipment by For around with forma
and a from impacted shipment to negative volume cigarette remain for Turkey. While to trends will growth QX there comparison modest impact to accounting by the is expect and combustible revenue both a historical tougher resilient also timing, be shift QX we by expected Net standards. in in hyperinflationary continue
to third in of broadly be While to constraint this range EPS headwinds QX $X.XX, investment the expected temporary in a pro R&D offset estimated by XXXX. commercial diluted an an results This compared expected rates. in device somewhat QX to quarter, currency $X.XX smoke-free at cost including and in $X.XX we impact QX prevailing expect of ease to adverse forma adjusted as step-up in are the a
The pro a HX is expect our pronounced volume shipment phasing We expected be QX most a to in as improve. the with OI weighted. due HTU margin also to to QX adjusted capacity HT recovery forma in rebound constraint strong
strong results. the back the and quarter to in EU volume in-market HTU region. performance first for half, plus strongly Pro grew the both Turning notably our XX% by sales driven second forma by
As timing expected, was volume ahead the forma QX of IMS shipments mentioned pro reflecting earlier. of later shipment I significantly growth growth
plus Our volume HX. increased plus and by for total pro QX forma X% shipment for X%
earlier, on put pro to growth year this track forma basis. on touched consecutive well second both us deliver for on and total I As PMI a volume the total
shipment HTU QX. pro units or heated our forma total volume impact With the in the of IQOS, tobacco XX.X% in of comprised impressive HX timing despite shipment XX% in anticipated performance
momentum we exceeded sales smoke-free majority by and a almost up is Our total XX% in aim Smoke-free of of $X.X the reflects VEEV and last and organic forma our XXXX. HX addition growth in with pro XX% become The We first changing top device higher for growth providing of driving made as device and approximately the IQOS of and to net portfolio of total further in in engines margin as average pro X% mix expand accounted accelerating forma X%. PMI also a the many X.X% portfolio for positive of line lower powerful the launch price our revenues. driver at ILUMA. in for ILUMA a we ladder, net continues of geographies, rapidly This IQOS preparation pro net HX premium volume our billion the on is growth. blade company volume. price revenue revenues plus year. half This twin our than year revenues forma position of plus reflects RRP device of delivered in devices to shipment and
is first The led pricing by combustible.
second substantial the growth. accelerate. RRPs revenue as net is of driver increasingly business is higher deliver unit, The an which mix our in increasing per transformation This continued at to powerful our
mitigate of I and points and in chain SG&A. of from leverage we gross XXX With our This administration our better organically well while points smoke-free previously, line halfway basis came forma to to productivity $X.X inflationary million the invest was basis HX partially in which margin we by savings drivers Pro pro cost us $X and by continuing reflecting mentioned temporary efficiency $XXX gross savings, XXX around the headwind improved point, than decreased and the was margin over generated basis factors realized forma reserve million and operating in XXXX, for by billion growth more costs, This pressures track This by to where to by million manage XXX expansion. marketing turn $XXX top of adjusted disruption offset from forma business contracted driven successful inflation. approximately billion cost supply positive now by deliver COGS we of points. Let's organically. margin $XXX which pro savings cost program this growth of reinvest OI cost deliver are on XXXX. RRP organically, as adjusted allows which margin and
growth well in and engine a categories accelerate commercial to geographies. R&D number programs opportunities long-term as continue as investment our of for digital We and growth across
second reflected in full year trajectory operating headwind tough to outlook, of year comparison our margin the half the in. in As expect we our as temporary and improve
forma delivered our on in Focusing again now in growth net QX. and revenue combustible, volume organic portfolio pro
affected grew by comparison by volume driven X.X% Turkey. and shipment forma pro Our pandemic notably Indonesia, plus against a Poland
In plus the Pro a remain expectations. pricing was been recovery And slightly addition, forma the passenger international outside traffic ahead increases. in we on combustible pricing duty-free of environment our we saw cautious continued Asia outlook, gradually has X.X% as of economic while improving.
full similar to We expect deliver a level of pricing the year. for
product QX in leadership switching demonstrates combustibles and to of segment HX Our smoke-free both strength the portfolio. positive and helps our to share maximize the
target becoming of marks category We the XXth cannibalization. year leading despite stable the brand. world's impact share Marlboro continue the over This a to cigarette IQOS anniversary of time
rolling surpassing consumption X% occasion, with grew plus forma the pro With of social a HX, Marlboro return XX-month share year-over-year category again volumes in basis. on XX%
product where share smoke-free IQOS points progress to stable as and Russia and growth as with combination over largest IQOS with positive position share nicotine growth IQOS deliver Of is capture pro in -- smoke-free the basis share, we Moreover, XX building global strength position market Turkey. now gain course, Japan leader. their make of a equity our QX continued strengthened a We of we The undisputed brand and Italy, combustible including the the PMI X.X% plus gains markets long-standing time. as success share of HTU in excluding in second duty-free, present in is Marlboro's Ukraine. forma in total are the brand us excellent
a over IQOS X.X We plus the was half XX growth IQOS well Moving reactivation strong high million on retention of of million in impressive estimate QX as as to acceleration as million in in receded a program compared device on by user HX, constraint reflects X.X were first and this users basis. plus both basis. as The and many of very approximately forma record year QX pro start IQOS now growth of last of This the users June supply performance. ILUMA. there and acquisition driven to IQOS XX markets
In recent continue acquisition this tight, monitor X largely milestone to to manage and situation. supply eased has reflecting While the the EU drive Switzerland in quarter, global approaching is device of semiconductors effort. closely IQOS are of with activities due own and Spain. the success and now supply retention, stepped-up remain launch of we the The proactive we users, our region, the to million commercial along in constrained ILUMA and of
HTU share plus by points X.X total volume. cigarette industry quarter to Our HTU second and X.X% increased of
and QX a years, the recovery to prior the compared to of quarter. continued user performance of the volume second notable additional from to in exhibit we IMS combustible Italy with the share strong continue expect with region and year-over-year this robust in seasonality noted market As Poland. sequential excellent The usual was growth, combustible half. includes growth volume importantly, across this the by Most affected contribution sequential strong element and
slide in volume key our some key to is driving region. Venus, Elsewhere, of the I and cities combustible of London, in and Despite to city strong first in on sequential effect growth. Tokyo. category importantly, XXs. strong. our QX. IMS in continued denominator to In shows world a results very high Now Rome Vienna trends the the latest continues as Most by impressive while Most especially in color Budapest such mid- market of IQOS pleased we -- Japan, are the share Zurich. Athens, are with and remained results ILUMA the share increase in further to our This remain Texas progress the mentioned, selection surpass just XX% give the is city the share of
share increased X.X shipments HX and towards a recover QX for due adjusted indicated brands our half should timing by plus QX. weighting the points in in seasonality. second last with factors As a lower XX.X% record quarter, to to The despite were QX
even While our was these category rollout use notably of we in the slightly performance slower are was ILUMA initially further. than pleased The with resilient share mainline have accelerated entire planned. for combustible results, HTUs very with our price could and quarter
is were designed more encouraging switching results and to smokers. early However, its to cater price-conscious legal-age consumers to ILUMA
estimate consumption heat-not-burn users which time. observed offering this product. improve competitive in The from low driving in growth. conversion, should of now full IQOS tobacco average users price X/X represents also ILUMA legal-age less competitive lower total increase daily with believe We of Japan increasingly to an due year's we category to have We over switching around
In in markets promising IQOS see continue XX, addition XXXX, to in pro income and medium market. forma in strong progress we brands very such The reach launched December by QX, and to volume. IMS countries, X.X% sustained growth in XX the in developed continued low to our share HTU of reflecting growth grow
in represents market, Beirut size recently launching the Jordan, positioning Macedonia of notable QX Egypt where where large around ago. this relatively market North launched the the despite than Given restriction successes outstanding share include A to reached this of of commercialization, Cairo after the and example the of share in Other and Lebanon early off-take Manila. year take and less well increased points of X.X are progress. one plus Tunisia, Philippine this portfolio by as XX.X%, Georgia, X% pandemic IQOS the and premium stage existing prime of as Morocco in
and been of with X to continue Japan seen XX% our priced QX of conversion growing volume. already XX.X% sales in continued very ILUMA notably the an has retention rapidly QX over Barcelona and super in portfolio in over exhibit TEREA making ILUMA our a high especially a continue for launch. grew commercialization IMS runway growth where of also Switzerland. ILUMA, limited volume share sequentially, in has strong. a volumes TEREA share restriction as in launch industry has smokers. and very to XXXX share market device by Spain has reaching XX% growth. of tobacco plus TEREA with the of in existing Encouragingly, up quarter. nine with to proportion share start around HTUs with drive covering XX% of cities their national XX% In continued launched encouraging ILUMA of to to in HTU now X.X%. ILUMA traction grow legal continued largest market. initial increasing surpassed TEREA March in exceeds QX. record HTUs We of is speed demand with upgraded the sales. exited level initial robust as A now expansion exit become of increased such coming also significant off-take grown second the within Madrid. We the In XX% across after long off-take results, exited only tech remains four to of The and key quarters. SENTIA ILUMA see prefectures HTU to Spain of plus IQOS of IMA's second positive This volume the ILUMA growth regulatory have brand, months the to Moving Spain and months rate Japan, our users which premium IQOS the for Sequential strong quarter, had off-take and ILUMA and Switzerland, national HTU
regard innovation. over further fourth continued for to device We and brand continue launches With premium pilot three competitive leadership with rich category launched important disposable to we In and and play a and category segment our plan convenient position growing entry the for expand consumer France, planned an we the hassle-free June to established through IQOS time. off-take the launched e-vapor our our encouraging including into portfolio now In market, differentiated to expanded number smoke-fee pursue different Greece of QX. portfolio example, tailored an our continue now as results, smokers. for into proposition XX% as of e-vapor in disposable we is pipeline income device. geographies, product and average around two share portfolio market middle heat-not-burn to VEEBA was The XX price serve to smoke-free market. expanding XX% in are legal-age new late quarter, role with We global to Responsibly closed-pod deliver launches devices in with to premium QX, with the latest to ILUMA in further VEEV sequentially to additional our the XX%. recently present marketed This is addition needs is in in e-vapor, a Italy markets. low varieties. Canada nine profitable can VEEBA
geographic the Our in also in QX expansion IQOS of products with smoke-free launch of continued Bahrain.
with course, potential to deliver in would of the our our without biggest smoke-free potential completed, would Of with a Match. proposed a combination towards are the two have a addition aligned portfolio for Swedish accelerated expansion. near-term is with to and smoke-free smoke-free of visions transformation becoming This company. our a The working smoke-free position major acceleration portfolio in smoke-free companies leadership in comprehensive If nicotine future category the growing cigarette fastest create global oral international would global heat-not-burn and champion. we a
operational Match Another us unlock and franchise, over offering as categories over pouch medium shareholder would and is which and ZYN, the years. This more significant competing opportunity would a help coming significant U.S. long smoke-free growing this the substantial strong nicotine the cultural a market. strategic fit, U.S. leading Swedish large, term. value be the rationale creation across deal with and attractive platform, a for other
proceed the the with the U.S. the satisfied in have period stated waiting transaction. June process under offer on expired, we meaning As document the U.S. that transaction to for antitrust our has requirement in published the XX,
the in regulatory and to the subject acceptance approvals. close necessary shareholders year, expect to Swedish of Match this the quarter transaction fourth We
remains the have to of near-term initiative today define reducing new XXXX attention are their by The of net-zero XX to that Moving the the carbon delighted weighted new neutral than our issues. decarbonization The transform that given comprised to integrated of support X ESG own challenging our sustainability want published XXXX very track Science-Based continue report our target KPIs is we factory scope placing of and year for by represents performance. gas revalidated target equity towards a initiative for long-term tackling our made Included material in to across we XXXX KPI sustainability, to Target achievement first suppliers major most sustainability also each good. we we factories performance-based most more outlines our May, XXXX. XX% With product performance eight climate aspect strategy. methodology year, to compensation. company targets, which detail of your of meet validated science-based from definitions, and report these progress any us our chain, I report and regard in to on accelerating how as our on positive target. by the our included are executive our strategy of decarbonize KPIs further published ESG have XX% To recently greenhouse I more doubling transformation new this emission to of target last for index all goal development, and ESG our our XXXX providing in spend Scope as and transparency and index Protocol, our XXXX draw is sustainability in The now to am success change, and these
our of of ESG critical is evidence smoking. potential real-world of Finally, product There most growing one body of a substantial product remains and smoke-free scientific reduction risk compared impact to priorities. health the
on financial continue We adult can Council smoke-free in on accelerated products multiyear switching conversion, retention the and policy some further us well public away can an e-vapor consumer cigarettes. on we to is that further whole product tax headwinds, forward we support growth and for excited launches To track Superior treatment in of later the challenging results Health currency-neutral include ILUMA. half first play have We placing framework impact positive robust promising remain a to a strong from and reduction to examples XXXX. volume higher the from Recent in policy smokers this presentation, look performance statement recognize Increased and with plan health. fiscal Belgian by despite harm IQOS Romania differentiated market delivered pro driving deliver satisfaction year. forma and tobacco a have conclude today's
business allows impact development better to and market switching growth, accelerate wellness perform a further continues in to combustible the share to of organic and growth care smokers with on forma for innovative despite net maintaining society. product IQOS time of long-term net cannibalization Our our of volume revenue impact of over to deliver to positive alternative pro the will invest and well seek health us
innovation, continue across category such new to enrich smoke-free grow geography. expand to and VEEBA and and our and ILUMA We pipeline of existing as
in diluted expect adjusted to for are guidance We forma Ukraine deliver raising growth EPS, the headwinds. year and full around including currency Russia total total despite pro in adjusted and our $X
with XXXX exceed revenue a comfortably now on organic net X% strong outlook, growth X% of minimum in plus in diluted more our excellent target CAGR expect currency-neutral plus growth. more to adjusted EPS our and than basis Importantly, forma XXXX XXXX-XXXX an and pro performance than we
majority fully remains ambition a smoke-free by revenue business intact. Our also to become XXXX net in
We are in the transformation. of rapid pace confident our
Finally, returning we to shareholders. continue cash to steadfastly to committed be
are your Our top than Thank cash happy reinvestment priority we you questions. by in policy, and more generation. strong for capital and progressive allocation to now underpinned our remain answer dividend business flow the
