Thank well. is and ladies hope the and welcome, safe Nick, gentlemen. everyone listening call to you, and I
to continue million, acquiring XX% IQOS QX. double-digit and Moreover, new of XX national XX.X from Our prior with key record business unprecedented the the compared despite The our almost of impressive pandemic. challenges significant XXXX, able the robust the XX% and switching growth and of reach from in total which constraint, in HTUs stopped net performance share impact a shipment IQOS the over minimal in exited by geographies very continued a cigarettes user pace year. of delivered restriction, to despite markets IQOS made X/X consumption December. revenues volumes million have a for Most switched XX.X of social user of strong we with market our to of IQOS, HTU year, were was in XXXX which up volumes shares grew daily to global smoking. at good saw in
Free tax faced was number combustible excise Our was the faced Indonesia due additional we increasing this and of effect the the with impact despite headwinds QX, strong of in Southeast business, digital restriction the rate The our prominence, pandemic-related by in least tighter model challenges word-of-mouth from the in user most again in propelled acquisition highest positive markets. also Asia, the and increasing EU. commercial were a Duty The impacted we where significant sophistication structure. in region to of
in efficiency excellent EPS of where operating standpoint, consumables, industry exceeded volumes the IQOS next From X-year HEETS, and years Despite pandemic heat-not-burn. and X quarter also increasing generation expect delivery significantly margins rebound which we broadened e-vapor wider target dimension lil the as year in and remain of the we range recovery heat with growth ahead challenges, launch This of drove X targets. business. full in reflects smoke-free to This of ahead our weight we prior and a our these cash year. in the reinvestment the profitability in as of also VEEV our a While portfolio a and the the fourth timing schedule, and enables the the cost recedes. were X over and again product duration such our of the and IQOS uncertain,
of FDA's progress modified recognition a X authorization the around This on positive regard. product risk the followed We this in scientifically of world switching good also premarket substantiated was December. also a version of was to IQOS authorization by major tobacco IQOS of to the device impact the smokers in milestone continue make The RRPs. the of
headline the numbers. to now Turning
in growth that many line was by net in solid drag headwinds net estimate We per our partial sales Our were tobacco of Combustible of year we driven exceptionally net pricing revenue markets offset X.X%, X.X% growth. these the top mix. in our Despite full alone, performance markets, on organic unit pandemic. on factors, revenue basis. X.X% Duty in an Indonesia. by plus our the declined the partially weight resilient pricing an This mid-single-digit IQOS volume saw a of recapture of context strong was Indonesia organic in local increasing by in reflecting and Free,
the both the volumes, This pricing X%. in income back on come guidance diluted increased previous exceeds the around operating organic resulting organic in full end by points a and The to Despite year. IQOS positive to improvement strong net effect, dynamic EPS organic growth the a the X% Organic offset to Duty Japan. declined of Indonesia in the and will in strong continued including while This QX, significant around market on performance fourth SG&A in our weakness combustible me net very combustible from to. margin decline I reflect XX% and which year by impact Indonesia, than XXX had and X% basis from our revenue the net ratio of almost lower revenue brings was plus more IQOS. adjusted which the the similar our Free revenue, also quarter, to basis. price of total adjusted of the X.X%, and Philippines, reflects Excluding decline on margin gross increase an
full Our by per same solidly factors again net as the revenue increased due unit year. X.X% to the
operating deliver adjusted Our EPS X.X% basis. growth, by on adjusted XXX margin to an basis expanded points all plus diluted organic income
strong expand in Before back turn full the we underlying on a dynamic year, I will more now detail. QX to the little
trend back Elsewhere, lesser and growth. deliver strength region to quarter in this occasion, to as the markets social strong revenue of lower and trade enabled than prior volumes a the shipment quarter and billion a combustible a XX.X volumes quarter. mid-single-digit We and restriction tobacco albeit of increase in some the cigarillos. market, markets total top for and offtake outperformed appropriate Despite XXXX Philippines East to which HTU With a tough and restriction to of for for strong expected and the of significantly the region, the inventory in the challenges first expected, a mobility later. starting to Free from to end I'll XXXX. Nonetheless, Russia. comparison, weighed price Japan a Eastern significantly the market in-quarter ongoing to rise Asia and and IQOS line weak, revenue tax-driven IQOS against the second growth. reached increase sellout the start impact in a Japan, units strong towards share aftermath reduced response by record a including and pandemic, was following tighten driven gave October in degree in performance, shipment total line and tough as a provide of a growth better business industry the we deloading a and in saw top price EU, wave of to in number immediate Indonesia comparison expect show led the Our the the second the finish both higher Europe to Australia year on social Duty to continued XX% consumer as the many EU continued decline In come
go now starting XXXX with is margin, me multiple by driven the drivers expanded points margin expansion, which basis XXX into on levers. of basis. This by Let gross our organic an
our ongoing of First, an is increasing IQOS mix delivering business. our transformation consumable in
Second combustible. is pricing on
on This pandemic, COVID-related in than on chain. in only to focus overall impact commercial lower achieved delivered pleased inflation, have Gross and our our on target basis. annualized manufacturing our device working. investment of to in of productivity while is in of focus cost processes, profitability, COVID-related billion compensated already by points supply basis IQOS by savings supply augmented X focus from came and us of that Over and addition improve our from I savings investment, efficiency and Third and an adjusted commercial margin invest cost. footprint percentage lower G&A and supply of reflects digitalization cost organic efficient growth the to combustible the thereof which on SG&A $X effect extraordinary our remainder end Clear XXXX. expansion extraordinary X/X as chain with gross continuing exacerbated report marketing, inflation, in XX chain allows productivity, our net combustible was lower focus costs to and and a volume, the for with of ways billion efficiency, our IQOS. efficiency offset very administration of revenue of of more manufacturing volumes. simplification $X.X the more by research over and including years, supply business engine chain and am XXXX our on ongoing cost we where came these costs, quality efficiency, the XXXX, The
operating pandemic, travel IQOS the COVID such Importantly, consumer our with channels. reduced ex global year, further fueling week's Investor a as Between an initiatives, our savings billion not well our costs impressive and manufacturing these, reflects efficiency of from uplift in the to SG&A excellent of in strong growth disruption of currency to of This elaborate $XXX for to nearly and us such and these include initiative $X year savings next like-for-like We the represents significant effect. shift expectation earning also at and $XX as profitability million chain. net X.X% performance higher the due flow capital least ongoing working above The cost necessary estimate supply digital resulting cash Day. plan do allowed at growth on a to in we billion. deliver growth around those and to
our $X.X lower into to translated amounted expenditures have performance manufacturing rate. historic capital ongoing in billion, below improvement run Our requirements. Significant
XXXX. benefited and expect in also we of However, of from $X.X investments certain around timing the CapEx billion
primary industry estimate X% the quarterly an decline. the on return another COVID business, category. the to to volumes, we average we dividend pandemic of year and X% in this U.S. around shareholders, use of excluding and raised on turn is to reinvesting Day. of the the cover allocation which share. by is in rate X% XXXX, cash X% $X.XX entirely from per Aside of will the I attributable China. historic combustible at almost effect is Investor This to to topic Capital X% now compares a difference declined We the to to the annualized
suitability has the reflecting in convenience displayed and different evident is As use our occasions. remarkable its category smoke-free results, resilience, for
been covered in combustible As consumption daily has main prior we in quarters, factors. driven lower by X have
with occasion usage in of global Duty of reduced with markets wage due large line second, closure amount on also and reduction And in amount depressed, workers. travel. Free hospitality restriction social the of confinement, during to the social especially in gatherings. remains daily occasion First, a settings
a recovery the expect seen and since most have mobility in recedes. severe of period gradual daily We pandemic improvement partial in QX, the a reduced consumption we as
shape uncertainty speed, resurgence a considerable infections. many all pandemic. exiting the serious timing of countries and we at remain there are experiencing in And As know, present, on the
the see expect of However, in based repeat our XXXX. severe of consumption on to recent do not we lockdown a experience QX drop situation, renewed with
this occur the be historic assumptions. year, floor come of is X% it to we back this average to in XXXX. assume I'll uncertain the guidance industry X% to if trends so any will However, for when rebound decline discussing
performance. our premium that to follows of volume and the combustible Free better volumes It and Indonesia occasions. compounded this our to should point share, by consumption our our exposure recedes, we were shortly. I'll see pandemic to and now Duty in Turning industry a dynamic portfolio as over-indexing Weak social come to market
on We remain strong track billion billion we units deliver the means of units XX IQOS the clear up As This say in This highlight IMS difference on more in volume out XXXX performance expected, heated XX% quarterly have volume our HTUs shipment The over level HTU XXX will with X% XX.X even was range fluctuation over XXXX. the on partly year, over to made performance over XXXX. end that to our X% billion inventory to of beyond to increased of mix. and no and this were between the billion reflecting shipments. was represent the in shipment XXXX just fourth to and XXXX our from well our billion week. target growth in in total by year, above of the on next revenues and quarter XX positive prior in communicated at an basis, plus compared year. tobacco XX XX% XX% previously upper our organic XX% the year of net as significant in outlook approximately
expect on IQOS growth. positive as providing powerful proportion and We of continue over grow momentum a revenue to the to continues, driver this time margin
users rapidly. net of the substantial mix revenue Eastern some our cycle revenue for X.X+ existing a introduced a made XX% X% is mainly lil total the and new longer year the of quarter. IQOS replacement naturally we sell for in Europe. full in In device, fourth and still IQOS sales approximately of Solid Our net now changing of mix. original up lower to due lower-priced RRP users, products to ratio Smoke-free have devices accounted billion we amount geographic geographies, $X.X the of
international share. total our market on now Focusing
very lower X.X cigarettes. by of share In was Indonesia. a for impact share heated increased by This tobacco Free the exceptions. our by reach volume offset increased X%, only key units, Duty before by higher share where with which markets share and meaningful to presence, points cigarettes Our points driven increased for IQOS X.X partly few has
Duty X.X% share by share Free international XXXX. Marlboro of total Indonesia. world's cigarettes negatively in our and market by was the However, impacted far remains brand with leading
share However, social in a lower to we similar its expect which Marlboro restriction. occasions, COVID-related tracked trend. to development over-indexes pandemic course movement the are and Indeed, naturally many consumption markets, it recovery the of aggregate during over year have saw
premium share and and volume total above estimate of industry to Marlboro of U.S. i.e., share given revenue, terms value closely of share, is In performance, which our to we financial related our net China, excluding more the significantly the positioning be IQOS.
grow turn by share a growing kretek to I our segment, After hand-rolled now difficult with share strongly to which value our enter driven again. XXXX, expect XXXX Indonesia. leadership sequentially We of in by we XXXX IQOS. is a stable the trend, supported
PMI where in into New XXXX. portfolio of in with with annual excise our are lower increase around is hand-rolled kreteks to will increase broadly and average unchanged. duty X, rates weighted average February average for given over prior XX% come line industry XXXX a This the excise our for rates is force the to over-indexing on increase
priced and coming financial is significant expect tailwind for higher-margin over both our there the and for year. lower a revenues, support consequences less market negative Indonesia, government performance machine-made product, employment we mobility not these significant level selling share has field the yet tax a segments, continued in constraints. Given Despite which With between issue progress the segments. X the hopeful retail to move government Tier playing minimum Tier slowly will given remain the to and been time. price, X below address that to respect We over enforcement this the than
in will compliance the on more no likely price in move to the new levels. excise of the industry large XXXX, with above industry the now expect the on level. now of pass impact And is of However, rate remainder the above the minimum minimum we The market majority limited. be is change
also Tier a in quarter the We the X in of in growth a and segment gradual below improvement fourth flattening our the volume. saw shipment
below other As a pre-pandemic improved drag remain consumption in still restriction. and financial markets, QX, sensitive Indonesia our since was results. to many daily level material social on but is XXXX
excise trend, structure smaller we impact much on for be to to and volume less on done XXXX, outlook share performance. the market ongoing much a much with remains better negative expect pandemic, a our uncertainty a the work there the While regard and overall industry
For fundamental minus consumption international intact, rebound reverse. we XXXX, of regard on as COVID adequate. combustible including category, the negative levels XXXX which The price our estimate we of category the global elasticity, the X.X total assume daily a a at remained also over impact cigarette on average With basis. investment around portfolio, to remain
of However, COVID. incrementally needed more aftermath immediate in may the be
by of which investing the equity continue brand remain world's will brand. We leading Marlboro, in the far
Given the a important performance. carryover will pricing impact growing And combustibles portfolio segment an of XXXX in COVID the Pricing driver of may our low-price management our of share be effect economic environment, gaps of strong. remains while remain the power and also the the focus. our of price variance,
pricing significant that HTU third as productivity in also due HTU top of I sole is highlight this the over addition represents This X performance. quarter higher XXXX. power IQOS mix, driver brands. users price. with increases IQOS sales the no around generating there and volumes XX.X would growth, line were We HEETS the on in weight Additionally, of of since X.X price the IQOS growth of and our our the to in other longer grow, move our end million of selling to increasing that pricing million now our XX. adult million user the as estimate December legal-aged average I
a user the year, the notably through renewed We the quarter have of in fourth acquisition restriction half number markets. in accelerate despite seen pandemic-linked second of
including million active combined the remote this momentum estimate of Russia. reflects widespread XX% smoker growth user strong and smoking, EU is with region, for that in across further We Japan IQOS have off. geographies, balance switched total XX.X various conversion. and digital to engagement, again stages all IQOS pivot momentum the with accelerated the IQOS to This paying brand, Our of stopped or and
acquired increasingly such As a us segmenting immaterial in and broader of price category. in the context points. and its of Japan the with our purchase smoke-free of new in of range device to in base the as Ukraine reach and half enriching into early second legal-aged expands lil the market the our our category and The we are of is helped smokers Though SOLID offer user lil users the at number stage, markets this Russia more addition in Russia, them and a bring base. user products through
to from industry IQOS previously, week. more fourth coming the on quarter As HTU of HEETS total cigarette we next In region, we'll in plan exciting we innovation volume. for have which bring elaborate said further the quarters, share and reached record a X% EU
a large gain, market, combustible million As attention Italy, the in the the prominence Germany I the reach QX. acquisition addition see QX in by strong organically, increasing contrast performance. to to quarter excellent This sequential We growth accentuated are growth share, contributors. a can follows of and winter X.X majority and such also and the the build strong the likely underlying your exiting that social in distorted the X.X coming which of were of XX% with in volumes. year with and slide, strong border months continuation between on strong recent this reflects converged and to closure shown and other further IQOS own product dynamic a XXXX in years as of and fourth future growth as to sequential user linked Poland awareness added user IMS seasonality with be reflects also progression million, in year-over-year its momentum. performance to consistent share, draw the this sequential IMS in share the quarterly the other fluctuation It pandemic, restriction. in
IQOS in and region. shares a saw HEETS U.K., demonstrate X.X Russia, with in National to which show in offtake the cities. addition, where performance shares the the record further quarter. London we We our almost key select and the Spain national share where In market the globally points and QX. to shares X% continued the we continued reaching strong also the X.X% key potential to in here Strong cities, and with I excellent EU reach show traction refer grow, progress by across of HTU for up both for you appendix, in key latter
of quarterly portfolio and category success the with reading in As stage the user and consumer of Ukraine, line broader quarterly notable smokers conversion with to spectrum. to in with sold be and user, SOLID purchasing expansion on we build socioeconomic year when ownership. context in acquisition adult our to are market. across with both we the A the business the of an the majority results the the Fiit commensurate latter And lil volume lil high you are lil the of the Fiit effect device The consumable a incrementality region, commercialization, in urge a device of of fluctuation shares. with early seasonality in in this broadly new consumable was both cater combustible acceleration product Russia of future. In to the with this in part IQOS level contributing Russia EU our of seasonal The at mind the highlight is can IQOS. the range of this in significant, small in
our representative region. this reach resonates strongly to again, and the growth IQOS barrier below purchasing Rapid are price commercial in in we excellent power segment serve very share whom segment the and, a across appetite the bodes even also such reported adjusted to as Japan, agile Menthol. extension smoke-free the legal-aged the Europe encouraging reached In Marlboro well supported the may recent HEETS alternative, with and in tobacco year have Eastern total medium line our more and share as by entering versus for of units movement, portfolio. indicators to market On share purchasing XX%. lower HTU Marlboro X.X and and model market The share. our October the trade continued including HEETS, prior progression to strength cigarillos be testament while the the price fourth for market X.X consumer ability the market quarter, medium launch upgraded by for increased points tier increase, total the share the heated to a by Black for of inventory and XX.X% basis, national brand of IQOS, following both tobacco HeatSticks price our for consumer our Marlboro our Both points smoker many power brands However, sequentially quarter price grew certain for markets for successfully highlighting in for category. HeatSticks and in
overall We of which grew pleased especially sales are by sequentially, reached in-market regard QX adjusted given consumer for our offtake HTU a the before QX which into the QX of offtake Tokyo, heated of IQOS of XX% tobacco XXXX price maintaining volume share strong The high QX, the in its segment. share made in up our December. with X.X% total the in milestone over XX% market performance forward brands as category tobacco increase. we pull
seen key which Tokyo, category. by share in the around milestone share in third overtaken terms, notable The working across A the in this in double continue offtake very quarter. Seoul digit in has Malaysia Kuala address of to And we while consumer picture of XX% has is already are our crossing December. Sendai. the market specific issue, that Lumpur Korean pleased market it's cities especially in QX challenges similar reached We including Japan, misperception
capability outside digital of In for which new in number Kuwait the of Maldives. markets the takes where markets, existing total geographic the half This markets: the our to growth in addition three OECD. to leverage launch to and over are IQOS We of XX, sale IQOS Estonia, available is strong expansion continue.
product, market August We XXXX, new in Czech first in the market continue EU IQOS in in This commercialization and the the coming follows including Zealand weeks. December. Italy lead enter we to the and continue XXXX, of launch our Republic Finland over e-vapor with VEEV, will New new market
As infrastructure at us commercial consumable and position. scale. previously, IQOS the will premium allows of efficiently to have Both said the and we the VEEV be device deploy
youth our great on products. to against access place all also guard for efforts importance We
at emphasize out further our reduce of issues are our testing on of ESG health X.X sustainability critical the first product, legal-aged the of roll significantly our in Switching pillar the our VEEV, that XXXX, technology we will is corporate our deeply and That's be highlights to aligned. we consumer. impact a our total focus. in global our strategy key IQOS we million unique cigarettes strategy and the sustainability. our the a company, can our milestones to This product differentiates and and want replacing as verification of mission. remain cigarettes and more why enter sustainability, sit business with with XX.X of we stopped smoker core as long-term our and not that of in As of addressing XXXX. million select we be serve most less of the from are value the have focuses strategy have negative impact a strategy now of proposition age with challenges Despite efforts pandemic, on By final we again to of our achieved harmful unprecedented core company P, I our estimate what the to our smoking. issues the number approach IQOS, alternative, smoke-free switched the input piece ESG+P to a out deviated category markets. framework. Phasing now sustainable And
to We back which recent some in at we'll achievement ESG, come Day. more notable across detail also show here Investor
another which are excellent we it an role including there pioneering do, speed the global impact, sustainability through story, example much work transformation materiality expect embedding in exit and into a significant turn and the as for sustainability make sustainability, unique growth, business to a tobacco words, of next and guidance to and main we I understanding to is the detailed disclosure we While shape our will innovation and return recovery. achieving from now of reduction. pandemic. and In where carefully XXXX, believe our PMI is other for our unknown we topic remains The approach opportunity transparency will to an week.
must we in this is to disruptive our clearly factor our into was performance coming COVID outlook not XXXX, the for and it over, While yet year. uncertainty
the many unfavorable assume first and also lockdown rollout markets, faced prior starting of place in pre-COVID year vaccine where across currently we in change an quarter not we measures With the do meaningful just comparison. any
Looking beyond for growth we in a of restriction, with reflecting which and a see is impact clearly observation depressed the the range assume less the a to this, level this return even in of organic assumed net by there event consumption of are second that severe providing ranges consistent QX prolonged revenue will in not our range are we outcome, and EPS. of These a XXXX, wave. our
For Duty of global travel the in-country Free, rebound a lag to likely is in mobility. improvement
investment. no assumes in for margin terms. guidance of scenarios likely on and XXX And EPS mix our This for this range into expansion points guidance to XX% adjusted dollar $X.XX assumes approximately the also growth This meaningful revenue speed not IQOS we plus Our billion of X-year industry assumption $X.XX of key target event This positive and HTU Free to a X%, the minus all growth X% This level assumption, efficiency, guidance basis EPS Coming flat estimated does of reflect least total volume the of thus, faster in plus adjusted growth range. year. to the This the recovery plus to range assumptions in share prevailing of of expect continued expect at to XXX of ongoing the diluted and shipment depending the growth to to of of business X% is achievement the favorable investment assume cost or EPS within XX from the Despite of in higher volume some this organic range XX%, reflects EPS organic recovery. units. plus growth, an an this of of impact organic our net effect shape X% $X. we tighter translates XX% net underpinning the of accretion in guidance, at pandemic. Duty progression rates, diluted of repurchases. currency our recovery in including other projected a billion
plus average X% excise to the historic also in with positive to Turkey volume by in in the and with We minus structural PMI incorporates in the outperform above manageable This trend including of X%. Indonesia, averages. resulting a Russia expect industry gains share of IQOS, and the increase outlook, increase forecast line change driven a
As mentioned remains earlier, our I power strong. combustible pricing
and COVID in Indonesia, pricing plus immediate we the X%, to of X% in Indonesia. X% XXXX, aftermath crisis, carryover of given combustible effect, XXXX However, assume notably the or around excluding
As business, average in likely is to per higher revenue for unit. growth top significantly the net XXXX, the higher biggest which be driver weight the of has IQOS line our
capital be year in and As that $XX around press exchange around cash will to strongly rate assume -- laid that assume at XX% rate morning's we tax working release, operating subject billion grow capital our requirement. out to will flow this full effective and prevailing to
I expenditure already assume we $X.X capital mentioned, As around of billion.
on first for me a moment expectation the quarter. the spend Let now
in number quarter. in IMS spread year-on-year addition be QX to shipment of likely which Our days to to in many This organic buildup seasonal largely lower net COVID-free to revenue selling we are slightly inventory volume March markets, sequentially being the XXXX, volumes in strong growth QX below from pandemic patterns we Due of to slightly incorporates as be strong stable XXXX. HTUs. stable to to lap benefited and QX, the normal down began around expect a the this a continued as and in
both and compared to market QX, share We also seasonal an underlying reported already mentioned. I combustible noting expect gains basis the the in strong on factor sequential HTU
the organic estimated margin in at $X.XX prevailing of primarily effect an which around and efficiency favorable progression realized in of due cost this growth in to IQOS effect positive should impact X%, currency We around $X.XX, EPS We expect rates. including to equates adjusted strong the mix an diluted believe XXXX. result the QX of
the the plus will results growth first To that no it tumult comparison come quarter, were growth and volumes organic EPS conclude, in QX revenues. than our should Looking expected, X% higher-than-average as beyond in easier stronger surprise net in year-over-year delivered XXXX. the of with enable
over growth a to through sustainable years. superior We coming and the are business building IQOS deliver
of the structural IQOS through challenges momentum demonstrate the Continued pandemic growth of characteristic. this
competitiveness business. We of the leadership our strong are to also committed and maintaining combustible
a of top bottom our have growth levers for number in We and line.
mix powerful effect the of IQOS. First,
which for for combustible where and, appropriate, RRPs. pricing important Second, remains
and manufacturing, VEEV business continue to Additionally, further model. costs we innovation lever product and of lil our chain in we hone as and offer are efficiency are SG&A the the stepping XXXX. in IQOS supply up our and launches with Moreover, our product, broadening
bring also IQOS platform. can heat-not-burn further our You exciting us expect to to innovation
and As smoke-free of the strategy, heart tirelessly I work mentioned, sustainability our further to is at we continue to our mission.
to more At we Our transform, there. Virtual we the In Jacek at same organization admirably most We and are capabilities. on challenging you to Day on coping answer recent incorporating and new confidence, and continued to skills Investor I the one forward with questions. growing our you. leveraging of now XX. and look XXXX, business will seeing short, topic demonstrated and February than happy extraordinary your period time, this forward our expand resilience in history. look through further in Thank Andre,