Welcome. Thank you for joining us. Earlier today, we issued a press release containing detailed information on our 2024 third-quarter results. The press release is available on our website at www.pmi.com. A glossary of terms, including the definition for smoke-free products as well as adjustments, other calculations, and reconciliations to the most directly comparable U.S. GAAP measures for non-GAAP financial measures cited in this presentation are available in Exhibit 99.2 to the company’s Form 8-K dated on today’s date, and on our Investor Relations website. Today’s remarks contain forward-looking statements and projections of future results. I direct your attention to the Forward-Looking and Cautionary Statements disclosure in today’s presentation and press release for a review of the various factors that could cause actual results to differ materially from projections or forward-looking statements. It is now my pleasure to introduce Emmanuel Babeau, our Chief Financial Officer. Over to you, Emmanuel.

Thank you, James, and welcome everyone. Following an excellent first half we delivered another outstanding performance in Q3. All key elements of the business performed at or above expectations, driving strong double-digit organic top and bottom-line growth, margin expansion and a significant acceleration in adjusted diluted earnings per share growth in dollar terms. As expected, both IQOS and ZYN accelerated on a sequential basis. IQOS delivered a significant step-up in HTU adjusted IMS volumes in Q3, which is historically a quarter impacted negatively by seasonality. This reflects the strong underlying momentum of the business, with adjusted IMS close to plus 15% ahead versus prior year with another very strong performance from Japan, reaccelerating momentum in Europe, and promising results from a number of global markets. With ZYN, we continued our efforts to increase U.S. production capacity in response to strong demand, enabling stabilization of share performance followed by sequential improvement throughout the quarter. This led to a significant increase in sequential U.S. volumes, with over 40% year-on-year growth despite capacity constraints. Outside the U.S. nicotine pouch can volumes grew by close to 70%. Our combustibles business also accelerated to high single-digit net revenue and gross profit growth, led by further very strong pricing, resilient volumes and the benefits of our cost actions. Our overall Q3 performance epitomizes the soundness of our strategy, with underlying momentum across categories with strong volumes, pricing and smoke-free mix supported by cost efficiency measures. With double-digit growth in both adjusted operating income and diluted earnings per share in currency-neutral and dollar terms, we are raising our full-year guidance. Turning now to the headline financials for Q3. We delivered excellent organic revenue growth of plus 11.6%, driven by shipment volume growth of plus 2.9%, positive smoke-free category mix and pricing. The combination of this positive top-line performance with the additional favorable smoke-free mix impact on profits and ongoing cost efficiencies enabled us to achieve growth of plus 13.8% in organic operating income and plus 18.0% in currency-neutral adjusted diluted earnings per share. This excludes an unfavorable currency impact of $0.06, notably due to weakness in the Egyptian Pound, Argentine Peso and the strong Swiss Franc, partly offset by the Japanese Yen. Despite the currency headwind, our proactive measures on pricing and accelerated cost initiatives drove plus 11.2% dollar growth in adjusted operating income and plus 14.4% dollar growth in adjusted diluted earnings per share to a record $1.91. This better-than-expected earnings delivery reflects IQOS and ZYN shipment volumes at the higher end of our expectations and a very strong combustibles performance. In addition we benefited from a lower net financing cost, including increased interest income as well as mark-to-market gains on derivatives that we use to manage the currency profile of our debt, driven by interest rate volatility. Combined with an excellent H1, this yields an impressive plus 17.2% year-to-date currency-neutral growth in adjusted diluted earnings per share, with double-digit organic top-line growth and 190 basis points of organic opening income margin expansion. Including currency, we delivered adjusted earnings per share growth of close to plus 8% which is a testament to our continued focus on delivering strong performance in dollar terms. Let’s turn to the Q3 financial performance by category, with both sides of the business producing excellent results. Smoke-free net revenues and gross profit grew organically by plus 16.8% and plus 20.2% respectively, driving 200 basis points of gross margin expansion. This reflects a robust IQOS performance in the quarter including manufacturing productivities, as well as the continued accretion of ZYN and a small but growing contribution from VEEV. Smoke-free gross margins were more than 450 basis points higher than combustibles in Q3 and more than 200 basis points higher year-to-date. Combustible net revenue and gross profit growth accelerated to almost plus 9% organically. Combustible gross margins improved by plus 10 basis points organically and by plus 20 basis points in dollar terms, marking the second quarter of expansion following a challenging 2023. We continue to target combustible gross margin expansion for the year in organic and dollar terms as cost pressures, including the impact of the EU single-use plastics directive, are more than offset by pricing and ongoing cost initiatives. Focusing now on volumes, we are well on track for our fourth consecutive year of volume growth. Our business delivered a remarkable performance of around plus 3% total shipment growth both in Q3 and year-to-date, with all categories and all four regions growing over both periods. Q3 HTU adjusted IMS growth of plus 14.8% reflects the underlying dynamism of our IQOS business, with a continued strong performance in Japan and a reacceleration in Europe as expected. Q3 HTU shipments of 35.3 billion units were at the upper end of our expectations, with the superior adjusted in-market sales growth compared to shipments due to shipment phasing, as highlighted in H1. Our oral smoke-free business grew Q3 shipment volumes by plus 22.2%, with ZYN powering U.S. growth of plus 41.4% and very strong international performance. Our VEEV e-vapor business exhibited continued volume momentum in the quarter, reaching the equivalent of 1.2 billion units on a year-to-date basis. Q3 cigarette shipments grew by plus 1.3%, outpacing the total estimated international cigarette industry excluding China and the U.S. at plus 0.5%. The unusually resilient industry performance this year reflects growing volumes in markets where smoke-free products are not permitted such as Turkey, India and Brazil, alongside a reduction in illicit volumes in a number of markets driven partly by geopolitical factors. Our growth includes notable contributions from Turkey, India and Italy and reflects good category share performance despite robust pricing. Our exceptional Q3 revenue performance reflected our three structural pillars of top-line growth: volumes, pricing, and smoke-free mix shift. Building on our very robust volume growth, pricing contributed plus 7.5 points of growth. This was powered by strong combustibles pricing of plus 9.7%, plus 3% pricing for IQOS HTUs and a notable contribution from ZYN. The positive mix impact of our smoke-free business delivered plus 1.4 points despite the strong growth of combustibles, given the higher net revenue per unit of both IQOS and ZYN. As in prior quarters, geographic mix was negative but to a lesser degree as growth stepped-up in Europe and the U.S. The year-to-date net revenue drivers were very similar, with double-digit organic top-line growth built on positive volumes, smoke-free category mix of more than plus 2 points and strong pricing. Turning to operating income, we delivered impressive Q3 organic margin expansion of plus 90 basis points, and plus 110 basis points in dollar terms. Gross margins increased organically by 80 basis points, and by plus 70 basis points in dollar terms. This was again driven by our higher margin smoke-free business, pricing and ongoing productivity savings across the value chain. Moving now to SG&A. Despite a planned step-up in commercial activity, our organic cost evolution was essentially in line with top-line growth, with plus 40 basis points of margin expansion in adjusted dollar terms supported by cost efficiency actions. As previously communicated, we target an organic increase in SG&A below the rate of net revenue growth for the year, while still supporting our smoke-free expansion with continued commercial investment. We delivered an incremental $180 million in gross cost efficiencies in Q3 reaching almost $490 million year-to-date, with initiatives notably focused on manufacturing and back-office costs. While only the first year, we are progressing nicely towards our 2024-2026 target of $2 billion in gross savings. On a year-to-date basis, our adjusted operating income margin evolution was also very positive with plus 190 basis points organic expansion and plus 40 basis points in dollar terms. We are well set to meet our full-year objective of expansion on both bases. Turning now to our IQOS business, which is celebrating the ten-year anniversary of its first launches in Japan and Italy. IQOS is the world’s leading smoke-free product, generating over $10 billion in annual net revenues. Notwithstanding the incredible growth and success of the brand over that time, there is a very substantial growth runway over the coming years as more of the world’s one billion legal-age smokers switch to better alternatives. Indeed, robust growth continues this year. We spoke last quarter about our expectation for a strong H2 delivery, with continued user growth momentum supported by our commercial programs, including events to celebrate the 10-year milestone. As expected, Q3 momentum accelerated with plus 14.8% year-on-year growth in HTU adjusted IMS and a very substantial sequential step-up of 1.8 billion units versus Q2, which is especially impressive in a quarter that is typically negatively impacted by seasonality. This reflects a return to double-digit growth in Europe, a continued excellent trajectory in Japan, and a further acceleration from our global markets. We expect further strong growth in Q4. The success of IQOS is built on technology, commercial capabilities, brand-building and innovation on both devices and consumables. Following the successful launch of the IQOS ILUMA i device in Japan earlier this year, we are expanding the rollout to more markets, including Italy, Greece, Portugal, Romania, and Switzerland. Focusing now on IQOS in Europe, I am pleased to report a Q3 reacceleration in adjusted IMS growth to plus 11.3% following a slower Q2 progression. This includes the resumption of growth in markets passing through the adjustment phase of the characterizing flavor ban. The majority of EU HTU volume is now covered by the ban, and we observe a return to robust growth in markets such as Greece, Romania, and Portugal. Following the stronger-than-expected initial impact in Q2, we are pleased to report positive volume momentum in Italy. This was supported by the launch of recent HTU variants, including our mainstream-priced offering DELIA, and tobacco-free LEVIA, jointly accounting for close to 7% of Italy’s HTU offtake three months from launch. In addition, we see excellent momentum in markets such as Germany, Spain, and the UK, and increasingly balanced growth across markets overall, regardless of IQOS penetration. Regional Q3 adjusted HTU share was up by +0.8 points year-on-year to 9.5%, and modestly lower sequentially due to the typical impact of seasonally higher combustible volumes in the summer. HTU adjusted IMS volumes reached 13.2 billion units on a four-quarter moving average, maintaining our high share of the category with robust sequential growth. Looking at our key city offtake shares in Europe, we see continued rapid progress in a large number of cities. An increasing number are posting growth of over 2.0 points year-on-year, which is the most meaningful comparison given seasonal factors. Particular callouts include Budapest, Athens, Bratislava, Bucharest, London and Amsterdam. Turning now to Japan, we delivered our eighth consecutive quarter of double-digit progression with adjusted HTU IMS growth of plus 14%, reaching 10.9 billion units on a four-quarter moving average. Our commercial programs continue to drive meaningful results, with innovation on devices and consumables propelling a +3.2 point market share increase to 29.8% in Q3 and surpassing the landmark of 30% in September. This includes the impact of the IQOS ILUMA i device, which was launched in Q1 and delivers enhanced consumer satisfaction. As shown on the previous slide, IQOS HTU offtake shares in key cities such as Tokyo continue to advance rapidly. We have previously flagged that Tokyo offtake share for the overall heat-not-burn category reached 50% earlier this year. This is also now true in eight cities overall including Yokohama, Kawasaki, Sendai and Fukuoka, with several others rapidly approaching the same milestone. This is clearly a positive sign of the enduring growth potential in a market with already high penetration. Taking a more global view, we continue to see very good growth across a number of global markets, as highlighted by key city offtake shares. These include cities in Saudi Arabia, Mexico, and Egypt, where Cairo reached close to 10% share. Offtake share of more than 5% in Jakarta is indicative of the strong acceleration in Indonesia, as we continue our geographic and portfolio expansion, including a growing offer of clove TEREA HTU variants. Finally, I would like to call out duty-free, where the ongoing travel recovery combined with the strength of our multicategory portfolio delivered dynamic growth, with ZYN and VEEV increasingly offered alongside IQOS. Moving now to ZYN, the number one U.S. smoke-free brand continues to see very strong underlying momentum. As flagged previously, we are working to progressively increase our production volumes, and this was reflected in a sequential acceleration to 149 million cans shipped in Q3. As we continued working through these supply constraints, ZYN’s category share stabilized and then resumed growth on a sequential basis through the quarter, despite a further $0.15 per can list price increase taken at the start of September. We continue to expect shipments to match consumer demand at some point during the fourth quarter. While gauging the level of underlying demand is not an exact science in the current circumstances, our promotional and commercial activity has naturally been lower as we prioritize meeting existing consumer needs over growing the legal-age user base from other nicotine categories. With ongoing efforts to increase our U.S. production capacity to around 900 million cans for the full year of 2025, and significant expansion beyond 2025 from our planned new facility in Colorado, we believe we are well positioned to capture ZYN’s potential over the coming years. We remain committed to driving industry standards in under-21 prevention, with policies and initiatives designed to prevent youth access. Our robust U.S. marketing code prohibits social media influencers and we refuse requests for such partnerships. All our owned product websites use age verification technology and we partner with WeCard and TruAge to support age restriction checks for retail sales. Overall, we are encouraged by the results of our efforts, which I’ll come back to. Combatting trade in illicit tobacco and nicotine products remains a top priority, and we dedicate a significant level of resources to support these efforts. We have strong governance and supply chain controls in place, and we take appropriate action where necessary, including limiting and/or terminating sales to certain customers in both the online and traditional trade, and we are continuously improving these control measures. We also closely monitor imports of products which may be illicit or infringing our patents and are committed to act on our own or in conjunction with the authorities to prevent these products being illegally commercialized. Our multicategory approach continues to gain momentum, as we leverage the strength of our leading brands whilst expanding the reach of our smoke-free portfolio. For nicotine pouches, we are focused on responsibly building the category with ZYN in international markets. Increasing category awareness and interest among legal-age nicotine users is driving positive traction in a growing number of geographies. We have increased ZYN’s presence year-on-year to 30 markets, including the Philippines, Mexico, several European markets as well as within duty-free. Despite still-limited distribution in some markets, we see continued strong traction in Mexico, Pakistan, South Africa, the UK and duty-free. The category also continues to grow robustly in Scandinavia. E-vapor performance remained dynamic in Q3, and we reached profitability at product contribution level in September on the back of excellent volume momentum and cost of good sold improvements. Europe is at the forefront, as closed pods continue to take share from disposables and we lead the category with our flagship VEEV ONE closed-pod system in several markets, including Italy, Romania and the Czech Republic. We are seeing good repeat-purchase and regular usage within a competitive environment, as we continue to build distribution and brand awareness. Outside Europe, we are investing behind VEEV for future profitability in a number of focus markets. We are underway with the first stage of our IQOS 3 consumer pilots in the U.S., with the launch of our “Be the first” campaign in Austin, Texas. As explained previously, the focus is on adult consumer engagement, building awareness through category and brand education in legal-age smoker communities. We do not anticipate any commercial volumes in 2024. The learnings from these pilots in Austin and other cities will be used to fine-tune our approach in anticipation of the at-scale launch of IQOS ILUMA, where we continue to assume an FDA authorization in H2, 2025. Finally, a brief comment on our Wellness & Healthcare business. As we disclosed in September, we have entered into an agreement to sell Vectura Group and expect the transaction to close by the end of the year. Our ownership of Vectura was important to develop the required skill and scientific expertise to advance our inhaled therapeutics pipeline. Significant progress has been made on this front, however given that Vectura’s scientific engagement and commercial CDMO relationships were being impacted by unwarranted opposition to PMI’s ownership, we believe the overall future of Vectura will be better served under its new ownership. Together with the divestment, we announced the establishment of master service agreements to support the continued development of our inhaled therapeutics proprietary pipeline. Our Wellness & Healthcare strategy continues, and we look forward to updating you on future developments, including launches of consumer wellness products. Moving now to combustibles, where our portfolio delivered a very strong financial performance. Net revenues grew +8.6%, driven by Q3 pricing of +9.7%. This includes pricing taken during the quarter as we continue to focus on value maximization, and was led by markets such as Egypt, Turkey, and Germany. As covered earlier this drove a very robust +8.7% increase in gross profit. With better-than-expected pricing of +8.8% on a year-to-date basis, we now forecast full-year pricing of +8 to +9%. Cigarette volumes were resilient, as global industry trends remain benign. As I touched on earlier, this can be largely attributed to markets where smoke-free products are not allowed or are early in their development, as well as the impact of significant industry efforts and geopolitical factors on global illicit trade in a number of markets. Our cigarette category share grew by +0.1 points in Q3 and year-to-date. Both Marlboro and our overall global brands achieved their highest quarterly share since the 2008 spin-off, with a corresponding positive impact on value share. As announced last week, there has been some long-awaited progress towards resolution of the decades-old cigarette-related litigation claims in Canada. Our Canadian affiliate RBH was deconsolidated in 2019 after entering the mediated CCAA process. The mediator’s proposed plan would entail a settlement of around $23.5 billion for the industry, payable from cash and cash equivalents in Canada and future combustible profits in Canada. The reconsolidation of RBH’s financial results after the plan is implemented would be subject to the final terms of the Proposed Plan and U.S. GAAP. We estimate reconsolidation would be incremental to PMI’s cash and cash equivalent, cash flow and adjusted EBITDA, adjusted operating income, and adjusted EPS numbers. I direct you to last week’s press release for further details. Moving now to sustainability. We are making continued strong progress towards our product transformation targets, including on access to smoke-free products. Our smoke-free products are now available in 92 markets, placing us on track for our aspiration of 100 by 2025. As a reminder, there remain a notable number of markets where smoke-free products are not yet available due to regulatory constraints, which in the case of heated tobacco make up close to one fifth of industry volumes excluding China, as covered at our Investor Day last year. We are also moving nicely towards our objective for low and middle-income countries to comprise over 50% of smoke-free products markets. Our efforts to increase access to smoke-free products are specific to legal-age nicotine users and tackling underage nicotine use is a critical area of focus. We are encouraged by the results of the U.S. 2024 National Youth Tobacco Survey, which reported youth usage of nicotine pouches remains very low at less than 2%, with no statistically significant change year-on-year despite the strong growth of the overall category. Such results can only be achieved through responsible stewardship of the category, and we are committed to continue driving standards in youth access prevention through a multi-stakeholder approach. Addressing our company’s environmental impacts is another key pillar of our sustainability strategy. We are working towards carbon neutrality in our direct operations, including certification of all our manufacturing facilities as carbon neutral. Year-to-date, we certified four additional sites, bringing us to a total of 52%. We have concrete plans for the remainder of our footprint in order to achieve the 100% aspiration by 2025. Additionally, we are progressing with the Alliance for Water Stewardship standard, certifying one additional factory year-to-date to place us at 86% against our goal of 100% by 2025. Combining our ongoing initiatives to address our environmental impacts with robust and rigorous reporting processes, we believe we are well-prepared for upcoming reporting requirements, including the EU Corporate Sustainability Reporting Directive. Okay. Turning now to our outlook for the full year. Following this stronger than expected year-to-date performance, we are raising our full-year volume, organic sales growth, organic OI growth and bottom-line currency-neutral and U.S. dollar forecasts. First to volumes, where we target record organic growth and increase our outlook to +2% to +3% total shipment progression. Within this, we continue to expect adjusted IMS HTU volume growth of around +13% and shipment volumes of around 140 billion. This forecast continues to assume an impact from the EU characterizing flavor ban of just over 2 billion units and no volumes in Taiwan, where we continue to await regulatory approval. For U.S. ZYN we forecast shipment volumes at the upper end of our prior guidance, in the range of 570 million cans to 580 million cans, reflecting the progress made on capacity expansion as well as continued strong demand. Our outlook also factors in a robust combustibles performance, driven by a resilient total category as previously outlined. Given the combination of stronger volumes with accelerated pricing and continued smoke-free mix, we are increasing our forecast organic net revenue growth to around +9.5%. This includes strong double-digit organic growth in smoke-free net revenue and should result in close to $15 billion in total for the year. With the impact of this improved top-line performance, coupled with IQOS and ZYN operating leverage and further cost efficiencies, we now also raise our forecast adjusted organic OI growth to +14% to +14.5% for the year. We continue to target adjusted gross margin expansion for both smoke-free products and combustibles, and adjusted OI margin expansion for total PMI, all in both organic and dollar terms. Accordingly, we are raising our forecast for currency-neutral adjusted diluted EPS growth to +14% to +15%, which also factors in lower-than-anticipated net financing costs, including higher interest income. This translates into a range of $6.45 to $6.51, including an unfavorable currency impact of $0.40 for the year at prevailing rates. The $0.06 increase in expected currency headwind largely reflects the same factors as Q3. On a U.S. dollar basis, this forecast represents very robust growth of approximately +7% to +8%. As reflected in this forecast we expect another robust delivery in Q4, despite a more challenging top-line comparison on the mix of shipments between categories. We also target another quarter of adjusted gross and operating margin expansion, including a planned increase in commercial investments behind our smoke-free brands. Q4 net financing costs are likely to be sequentially higher, notably given the mark-to-market benefit in Q3 from the volatility in interest rate markets I mentioned earlier. Our expectations for strong operating cash flow of around $11 billion for the year are unchanged, and factoring in the most recent currency moves we now target a 0.3 times to 0.4 times improvement in our net debt to adjusted EBITDA ratio in 2024. This places us well on track for our target ratio of around two times by the end of 2026, with buybacks to be considered, subject to Board approval, once we are within sight of this goal. In conclusion, we delivered another outstanding quarter reflecting the strong underlying momentum of our business coupled with our proactive steps to support superior growth in dollar terms. We are delivering on all key metrics, with best-in-class volume and pricing, in addition to substantial margin expansion and earnings growth on both a reported and dollar basis. We are raising our growth outlook for an exceptional 2024, with growth rates comfortably above our 2024-2026 targets. While the industry dynamics affecting combustible volumes may be specific to 2024, the key drivers of our growth are both structural and sustainable. Legal-age smokers are looking for smoke-free alternatives and we are building strong and profitable premium brands with IQOS, ZYN and VEEV to lead the smoke-free category. As we continue our powerful smoke-free transformation, we have significant further opportunities both in the U.S. and internationally. Importantly, we raised our dividend in September for the 17th successive year, in line with our progressive policy. We retain a strong and growing cash generation profile, which enables both reinvestment in long-term growth and the capacity for substantial shareholder returns. Thank you very much for your attention, and we are now very happy to answer your questions.

Our first question comes from Bonnie Herzog with Goldman Sachs. Your line is open.

All right. Thank you. Hi Emmanuel hope you are well?

Good morning, Bonnie.

I have a question on IQOS. I wonder if you could maybe comment a little bit further on the expected volume trajectory for IQOS, shipment volume growth did decelerate to the high single-digit range in Q3 from double-digit history. So I know there were some timing impacts and seasonality. But just could you maybe update us a little bit further on that in the quarter than maybe how that will reverse in Q4. And then also hoping for more color on volume, IQOS volume that is in East Asia, which has also decelerated just the drivers of that and whether you expect shipments to improve in the region in Q4?

Sure, Bonnie, with pleasure, and you’re giving me the opportunity to maybe be back on the fact that when you look at IQOS, I really urge you to watch at the in-market sales, the adjusted in-market sales, which is the best proxy we can have from consumer off-take. And on that indicator, the good news was the confirmation of the reacceleration that we were expecting and we have been flagging the fact that we’re expecting accelerated momentum on IQOS in H2. And we are indeed seeing that in our Q3 adjusted in-market sales because we are almost at 15%. You were asking the question about East Asia. Actually, Japan delivered again around 14% of adjusted in-market sales. So the market for IQOS remains extremely dynamic despite the fact that we have, of course, already close to 30% market share, but we continue with strong double-digit, and that was a very good news. What happened in Q3 to explain the acceleration is, as I said, continued very strong dynamism in Japan. By the way, South Korea is also doing well. And we – I think we are showing the number in Seoul where we are nicely growing the market share. Then there was a reacceleration in Europe. And I know that we received a lot of questions, okay, how confident can you be in the fact that Europe is going to reaccelerate. We knew that we were going through this transition phase for the flavor ban. And we see the market progressively exiting the disruption of the ban with the reacceleration. Italy was, of course, during the third quarter, the country with the reacceleration and that was nice to see Italy clearly restarting on a very strong foot, the growth on IQOS. And we resumed double-digit growth on adjusted AMS in Europe in Q3. And then you have a number of other markets in the world. And I would say we see momentum here building up, which is very good news for the future. I could mention, of course, Indonesia, Saudi Arabia, Mexico, I think EU here as well. I mean, we see a number of markets where there is – and of course, Egypt, but Egypt has been now for more than a year with growth, where we see real momentum emerging behind IQOS which, of course, we’re just at the beginning. So a lot of potential but that is very encouraging on the fact that we have nice growth relay outside Japan and EU for the future. So that’s really what we’ve seen in Q3. Now you have the question on the shipment. Well, we’ve been flagging the fact that shipment would be – trajectory would be disconnected from the consumer off-take. We had some very strong growth in the first two quarters, which was notably driven by comparison year-on-year. There was, of course, a Red Sea disruption that generated some shipments in the first part of the year. And therefore, today, we have shipments that are a bit lower for the third quarter than the adjusted IMS. And we’re just, if you want, here for the nine months going to a situation where gradually, we are equalizing adjusted IMS and the shipments. So that’s what we are seeing. And in Q4, we’re going to be with more equalization because we’re going to be facing two elements. The first one, regarding the Red Sea disruption, we’re going to have some reversal in Q4, so that will play negatively on the shipment. And we also are facing some high comps last year as we are building inventory to prepare the transition for the flavor ban in Europe. So that’s a high comps in time of shipments last year. But at the end of the day, you should expect adjusted IMS and shipments through a certain period to evolve in parallel way. And as we said, we continue to expect, for Q4, a renewed momentum on consumer off-take or what we call adjusted market sales, which is really what matters. That’s what is important because that’s what is talking about the health of IQOS.

Yes. Okay. All of that makes sense and it’s really helpful. Thank you. And then maybe a second question on ZYN. So the supply constraints appear to be easing, which is great. So I just wanted to confirm, Emmanuel, that you are on track to fully restore supply levels this quarter? Or is there a chance this bleeds into maybe early next year? And then when this happens, how quickly do you expect ZYN to recapture some of the lost market share? And just curious what role will potential stepped up promos play, I guess, if at all? How are you thinking about that? Thank you.

Sure. On ZYN, Bonnie, we said somewhere in Q4, we will have the supply to the market, meeting consumer demand, which to clarify again, doesn’t mean that we will have fully been replenishing all level of inventory. Here at that point, we believe for what we can assess of the consumer demand that what we bring to the trade will correspond to what the consumer will take from the trade, will buy from the trade. But then there will certainly be – and I’m not able to tell you what is going to happen during this quarter. But I think we are still in this perspective then, but that’s probably more for 2025, there will be a replenishment of the out-of-stock situation. And we will gradually – but that’s going to happen only gradually probably through 2025, put back the level of inventory to what it should be normally and that certainly will take some months as we continue to increase the capacity. Remember, we said that for the full year 2025, we are targeting an overall capacity of around 900 million can. Of course, that is a capacity that we are going to build gradually. It won’t be there at the beginning of the year. And I would say the replenishment and being back to a fully normal situation is going to happen only gradually through 2025. And of course, when we can be more specific about that, we will be more specific with the topic. So that’s for supply. When it comes to regaining share, so what we’ve seen is that, in fact, when the availability of ZYN went down, we’ve seen the category slowing down because, obviously, it seems that a number of buyer of ZYN are not intending to buy another brand. And therefore, when they don’t find their ZYN, they are maybe producing or consuming something else. But that probably has been slowing down a bit the category. We will see how we gradually recover. We’ve seen in the second part of the Q3, some improvement sequentially on our market share, which is good news. We believe that we have some positive outlook as we regain availability for the product, but it’s difficult to be more specific than that at that stage.

All right, thank you. I will pass it on.

Thank you.

Thank you. And our next question comes from Gaurav Jain with Barclays. Your line is open.

Hi. Good morning, Emmanuel.

Good morning, Gaurav.

A couple of questions from me. So just looking at the cigarette markets internationally, your pricing guidance, you have increased 8% to 9% and yet volumes are positive. The factors that you’re mentioning why volumes are so strong, which is lack of SBD in Brazil and Turkey, lack of smuggling probably from Russia, Belarus, all these countries. They should continue in FY 2025. So shouldn’t then FY 2025 also be a pretty strong year for cigarette volumes and pricing internationally. And within that context, can you also touch on if there are any disruptive excise tax hike happening in the next few months?

Thanks, Gaurav, for your question. So I don’t want to enter now into commenting 2025. And of course, in due course, we’ll share with you on the outlook for the year. I think what we are seeing in 2024 is well-identified. We talk about a number of markets where smoke-free products are not allowed. Sometimes you have increasing the prevalence, sometimes you have demographics that are playing positively for the consumption of cigarettes. I think India is a clear market when it comes to demographic, for instance. And it’s difficult to say how long all that is going to play and what’s going to be the continuation of this trajectory. I think we need to be a bit cautious on the outlook, but it’s true that I cannot say that everything will finish on the 31st of December 2024. So we don’t know what’s going to be the trajectory in 2025. What is certainly good is to see that we are able to actually grow volume, grow share of segment and, at the same time, increase price in a very dynamic manner, which is a tribute to the strength of our brand, and it’s true that the 9.7% in Q3 was a remarkable price increase. Don’t take that for Q4 as a guidance, but that was very good in Q3. And that shows that in this category, where I think we’ve been clear on our objective, which is really to maximize the performance on combustible in order to accompany and help the fastest transition to smoke-free. I think this strategy on combustible is working and delivering. And remember, we also said that in 2025, we expect a number of positive evolution for combustible cigarettes when it comes to cost of goods, where we’ll have a lower level of headwinds. So there will be continuation of price increase in the future without a doubt. Nevertheless, don’t take the 8% to 9% as the guidance for the future. We always said that we were more mid-single digits on the medium term. And we should see less headwind on cost of goods, which is probably good for the combustible cigarette profitability. On excise tax, at that stage, there is nothing really material I can report, I would say, traditional discussion, but we’re still a bit early. You know that many, many decisions are made in November, if not in December, so probably we’ll know more at the end of the year. But so far, I would say nothing specific or unusual to flag.

Sure. Thank you. And my second question is on your e-cigarette comments. So what you told us is that you have shipped 1.2 billion sticks year-to-date. And if I understand correctly, you are using the conversion factor is 1 ml is 10 sticks. And if I assume 1 pod is 0.7 ml then you’re shipping 160 million pods. So that would suggest that your e-cigarette revenue run rate is $300 million to $400 million, at which your contribution basis breakeven. So am I ballpark correct and all these numbers are done?

Yes, I can certainly confirm that 1 milliliter equates to 10 sticks, 10 cigarettes. That’s the equivalent. And I would say that ballpark, I’m not going to confirm exactly, but you are not million miles away from the reality on volumes. On revenue, I won’t comment.

Sure, thank you so much.

Thank you.

Thank you. Our next question comes from Faham Baig with UBS. Your line is open.

Hi, Emmanuel. Hi, James. Thanks for taking my questions. A couple from me, please. I want to start with vapor, particularly because one of your peers highlighted that in Europe vapor is seeing greater success in sort of fully converting smokers than heated tobacco. I know I’ve asked this before, but I wanted to get your latest thoughts on this topic as well as whether you’re seeing an acceleration in vapor adoption as you sort of roll out VEEV in several markets.

Sure, Faham. With pleasure. So on greater success from vaping in convincing smoker, we don’t see any of that. The experience is very different. It’s quite obvious that versus heat-not-burn, heating a liquid, which has no tobacco is delivering a very, very different experience. And I think all markets are pointing to the fact that there is clearly a much, much higher and much better conversion from smokers to heat-not-burn into vaping. And I think the success of IQOS is brightly illustrating that, I have to say, I’m not coming back on the performance on IQOS. I don’t think we are really seeing an acceleration in the adoption of vaping. The vaping market, the vaping category is impacted today by many, many regulation evolution or potential evolution. We know that one of the problems of the vaping category is that you have a responsible player going for fancy flavor, unacceptable marketing behavior that can generate underage consumption that can be creating some disruption. We know that notably the disposable category has been generating some of that. But if you look at the – what we can say of the legal age nicotine user, I don’t think that we can report any acceleration that would be meaningful from vaping. Regarding the nicotine part in the U.S., and your question on what we do, can you first allow me a general comment? I think that PMI is at the forefront, at the very forefront when it comes to fighting illicit trade. And that is true for the U.S., that is true everywhere in the world. We commit huge resources, I mean, investments in fighting illicit trade, working with authorities, regulators in many countries to do that. And for us, it’s a very, very important battle, a very important fight. So, the U.S. make no exception. And yes, when we are aware of illicit, when we are aware of product infringing, potentially our patent, we are acting. I think that in my remarks, I signaled some of the things that we do. When we identified the sources that are potentially outside the U.S. we could go to even terminating sales to these sources. I said it. We are working with distributors. It can be informing, creating the awareness for illicit product writing to distributor. It can be sending cease and desist letter to distributor retail where we see an issue. And we do that on our own or working with the regulator, as I said, in the U.S. like everywhere in the world. So you can be sure that we take that extremely seriously.

Thanks, Emmanuel.

Thank you very much.

Our next question comes from Priya Ohri-Gupta with Barclays. Your line is now open.

Hi Emmanuel, thank you so for receiving me.

Hi, great.

Just two quick ones from me. First, it does look like you modestly sort of took down the top end of your potential deleveraging for this year by a little bit if you could address sort of what drove that? And then secondly, you do have a fairly sizable amount of maturities over the course of 2025. Any thoughts on pulling some of that refinancing forward into the remainder of this year, just given where markets are opportunistically? Thank you.

Yes, taking these two questions with pleasure. So, on the slightly and very modestly narrowing the guidance for deleveraging, it’s because of the euro strength at the end of September that was – because as you know, we have a significant part of the debt in euro and therefore, when the euro is going up versus the dollar, that can have a kind of one-off element because we always have this discrepancy between an EBIT that is calculated on an average rate for the year when the debt is going to be calculated on the spot on the 31 of December. So we’ll see where we land. But the trajectory is clear. And you may have seen that at the end of the third quarter, we have generated cash flow of $8.2 billion, and that is simply $2.3 billion above the cash flow generation at the end of Q3 2023. So, we are highly generating cash, of course, on the back of a very strong momentum in the business, but that’s good news. Yes, I mean, I am certainly not going to discard the possibility for us to be active on the refinancing market in the coming months. I am not going to elaborate now on that, and we have a number of options that are open to us. But you can be sure that we are already working on how to put in place the best refinancing again in the coming months for PMI.

Thank you so much.

Thank you.

Thank you. Our next question comes from Gaurav Jain with Barclays. Your line is open.

Guys, just a follow-up on the Canadian litigation settlement. Would these payments be tax-deductible? And when do you think something final will happen in this long run in sort of COVID case?

Thank you, Gaurav. On the Canada litigation, so you have what we can say at that stage in our press release that we have issued last week. It’s too preliminary. And as I said, I am not able to tell you whether it’s going to be tax-deductible. Of course, as soon as we know we will let you know. But for the time being, I am not able to say. And as you may have seen in our release, where we shared what we can share at that stage, there are still a number of elements in this proposed solution put on the table by the mediators to be finalized. And of course, once we have the final terms, we will come back to you with this answer, of course, but also all the question on what’s going to be the impact for PMI of a final settlement.

Thank you so much.

Thank you.

Thank you. I am showing no further questions at this time. I would now like to turn it back to James Bushnell for closing remarks.

Thank you for joining us today. Please reach out to the Investor Relations team if you have any follow-up questions. I am wishing you a good rest of the week and earnings season.

Look forward to speaking to you soon. Thank you. Have a great day.

This concludes today’s conference call. Thank you for participating. You may now disconnect.