フィリップ・モリス・インターナショナル (PM) 2026年第3四半期決算説明会：スモークフリー分野の成長と見通し

主要なポイント

• フィリップ・モリス・インターナショナル（PM）が発表した2026年第3四半期の売上高は前年同期比5.5%増（オーガニックベースで7.1%増）の114億ドルとなりました。調整後営業利益はオーガニックベースで10.5%増加し、初めて50億ドルを突破しました。
• 調整後希薄化EPSは前年同期比5.4%増（為替の影響を除くベースで6%増）の2.36ドルとなり、四半期として過去最高を記録しました。前年同期の税率が低かったことが、第3四半期のEPS伸び率を約4ポイント押し下げました。
• 総出荷量は0.6%増加しました。スモークフリー（煙の出ない製品）の出荷量は2.7%増加した一方、経営陣が言及した業界全体の1.1%減少に対し、紙巻たばこの出荷量は横ばいでした。
• IQOSの調整後市場実売数量の伸びは7.1%に加速し、日本とポーランドを除くと約10%増となりました。VEEVの出荷量は62%増加し、米国のZYN出荷量は4.2%増の32億パウチとなりました。
• PMIは2026年のオーガニック売上高伸び率見通し（5%〜7%）およびオーガニック営業利益伸び率ガイダンス（7%〜9%）を維持しました。調整後希薄化EPSは8.29ドル〜8.44ドルと予想されています。
• 経営陣は、米国での投資増大や地政学的コスト圧力を反映し、通期の営業利益およびEPS伸び率が各予想レンジの中央値または下半分の水準に着地すると予想しています。

主要財務データ

粗利益率は第3四半期および最初の9か月間（年初来）の双方で、オーガニックベースで80ベーシスポイント拡大しました。PMIはこの改善の要因として、価格引き上げ、好調なスモークフリー製品の構成比拡大、スケールメリットの拡大、製造生産性の向上を挙げています。同社は2024年以降で累計20億ドル以上の総コスト削減を実現し、3カ年目標を予定より早く達成しました。

事業および業績の動向

IQOSおよび海外スモークフリー製品

IQOSの調整後市場実売数量は第3四半期に7.1%増加し、第2四半期の5.1%増から加速しました。日本とポーランドを除くと、当四半期の伸び率は約10%、年初来では約11%となりました。

ドイツ、ギリシャ、スペイン、インドネシア、英国、オランダ、およびグローバル・トラベル・リテール（免税店等）で、第3四半期のHTU出荷量が2桁増を記録しました。また経営陣は、イタリア、ギリシャ、スペインにおける年初来の調整後市場実売数量も2桁増となったことを強調しました。

日本におけるIQOSの調整後市場実売数量は、第3四半期に3.4%増加しました。10月の値上げを控えた消費者の駆け込み需要（在庫積み増し）を除いた実質的な伸び率は1.3%でした。経営陣は、駆け込み需要の反動減と値上げへの消費者の適応により、第4四半期は軟調になると予想しています。

海外スモークフリー事業の年初来売上高はオーガニックベースで約10%増加し、売上総利益は12%増加しました。粗利益率は120ベーシスポイント拡大して70%となりました。

VEEVおよびZYN（海外展開）

VEEVの第3四半期出荷量は62%増加しました。欧州各市場での成長とカテゴリーでの首位獲得に支えられ、年初来の出荷量は68%増の40億個相当に達しました。

海外市場におけるZYNの年初来出荷量は15億パウチに達し、前年同期比較（ライク・フォー・ライク）で6.3%増加しました。第3四半期の伸びは7%に加速しました。北欧市場を除くと、年初来のZYNの市場実売伸び率は30%でした。

米国におけるZYNの投資サイクル

米国のZYN出荷量は第3四半期に4.2%増の32億パウチとなりました。2025年9月の特別販促活動を除いた伸び率は13%でした。また、出荷量は第2四半期比（前四半期比）でも10%増加しました。

米国の売上高はほぼ23%増加し、売上総利益は24%増加しました。PMIがZYNの新バリエーション支援やブランド育成に向けて商業支出を増額したため、調整後営業会社利益（OCI）は1.5%増にとどまりました。

PMIは、1.5mg、3mg、6mgの主要なZYNバリエーションについて、1缶あたりの入数を15パウチから20パウチへと移行しています。経営陣は、他の条件がすべて同じであれば、これは1パウチあたりの売上高が約25%減少することを意味すると述べています。米国の販管費（SG&A）は第3四半期に約3億7,000万ドルに達し、第4四半期には前四半期比で約10%増加する見込みです。

経営陣は、フレーバーの拡充とニコチン濃度の高い『ZYN Ultra』製品の投入に支えられ、米国におけるZYNのカテゴリー店頭消化（オフテイク）シェアが6月から9月にかけて1.4ポイント上昇したと推計しています。

紙巻たばこ製品

紙巻たばこの出荷量は第3四半期に横ばいとなり、年初来では1.2%減少しました。第3四半期の紙巻たばこ製品の値上げ率は8.9%に達し、年初来では9.1%となりました。

PMIの海外紙巻たばこカテゴリーにおけるシェアは0.4ポイント上昇し25.9%となりました。マールボロのシェアは過去最高の11.4%に達しました。海外紙巻たばこ事業の売上総利益は第3四半期に9.8%増加し、年初来では7.4%増加しました。

経営陣による業績ガイダンス

経営陣は、通期の営業利益およびEPS伸び率がそれぞれのレンジの中央値または下半分の水準で着地すると予想しています。同社は、米国での投資増大、中東紛争に関連するエネルギーおよび海上輸送コストのインフレ、ウクライナにおける事業混乱などを理由として挙げています。

PMIは、ZYNのポートフォリオ変更、小売り支援、商業支出、および製造能力増強の影響により、第4四半期の米国調整後営業会社利益がゼロ近辺またはわずかにマイナスになると予想しています。経営陣は公式な2027年ガイダンスを提示していないものの、第3四半期の米国における支出水準は2027年のランレート（年換算ベース）の妥当な目安になると述べました。

リスクおよび注視項目

• エネルギーコストおよび輸送費の上昇が仕入価格に波及しています。PMIは、これらの圧力が通期の調整後希薄化EPS伸び率を約0.5ポイント押し下げると試算しています。
• サプライチェーン施設への損害を含むウクライナでの事業混乱により、通期EPS伸び率がさらに0.5ポイント押し下げられる見込みです。
• 日本におけるたばこ税引き上げに伴う価格改定は、出荷量および消費者在庫の変動をもたらしました。経営陣は、通期におけるIQOSの出荷量の伸び率が、調整後市場実売数量の伸びをわずかに下回ると予想しています。
• ZYNの1缶20パウチへの移行は、1パウチあたりの売上高を減少させ、一時的な小売り支援が必要となります。これが第4四半期の米国の売上高および収益性の重荷となる見通しです。
• 経営陣によると、ドイツで予定されているたばこ増税は正規の紙巻たばこ販売量を圧迫し違法取引を助長する可能性がありますが、加熱式たばこは紙巻たばこに対する税制上の優位性を維持する見込みです。

アナリストQ&Aの要点

アナリストは米国でのZYN投資の規模と期間に注目しました。経営陣は第4四半期の支出が非常に高水準になると述べたものの、第3四半期における米国の販管費（約3億7,000万ドル）が予想される2027年のランレートを示すより適切な指標であると説明しました。また、コロラド工場の稼働率向上により、増産に伴う固定費吸収が改善する可能性があります。

ZYNのイノベーションについて、経営陣は拡充されたドライフレーバーおよび9mg・11mgの『ZYN Ultra』シリーズに対する消費者の初期の好意的な反応を報告しました。同社によると、新製品は法定年齢以上の喫煙者、競合製品のユーザー、および一部の元ZYN消費者を惹きつけているとのことです。

IQOSに関しては、経営陣は実質的な成長モメンタムが引き続き力強く、地理的にも分散されていると主張しました。日本とポーランドを除いた年初来の調整後市場実売伸び率が、2025年の10.6%に対し10.8%となったことを指摘しました。2027年に予定される日本の増税が紙巻たばことHTUの間でバランスの取れたものとなれば、混乱は少なくなる可能性がありますが、公式な成長ガイダンスは提示されませんでした。

経営陣はまた、米国のZYN出荷量とスキャナーデータ（レジ通過データ）との乖離について、流通網の拡大と新バリエーションの初期棚卸資産配置（初期在庫投入）を部分的に反映したものであると説明しました。既存の新しいフレーバーやZYN Ultraは広範な流通網に到達しており、その他の強度（ニコチン濃度）の製品展開も進められている最中であると述べています。

決算説明会トランスクリプト全文

決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Good day, and thank you for standing by. Welcome to the Philip Morris International 2026 Third Quarter Results. [Operator Instructions] Please be advised that today's call is being recorded. I will now hand it over to our first speaker, James Bushnell, Vice President of Investor Relations and Financial Communications. Please go ahead.

James Bushnell

Welcome. Thank you for joining us. Earlier today, we issued a press release containing detailed information on our 2026 3rd quarter results. The press release is available on our website at 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 the exhibit to our Form 8-K dated today 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.

I'm joined today by Massimo Andolina, Group Chief Financial Officer. Massimo, over to you.

Massimo Andolina

Thank you, James, and warm welcome, everyone. We delivered excellent performance in the third quarter with continued volume momentum, putting us firmly on track for a sixth consecutive year of total shipment growth and yet another year of best-in-class results in 2026. The strong underlying momentum of our smoke-free business continued with IQOS HTU shipments at the high end of our expectations and accelerated growth fundamentals across all 3 of our flagship brands. Coupled with standout combustibles performance, we achieved plus 7% organic growth in Q3 net revenues and more than 10% growth in operating income. Despite challenging comparisons on smoke-free shipments and incremental cost pressures, notably due to the ongoing conflicts in the Middle East and Ukraine.

Q3 adjusted OI exceeded $5 billion for the first time, while our adjusted OI margin reached close to 45%. Our strong operational performance supported better-than-expected adjusted diluted EPS growth of plus 6%, excluding currency, to a record quarterly level of $2.36. IQOS continue to deliver strong and broad-based progress with adjusted IMS volume growth increasing to plus 7.1% in the quarter or plus 10%, excluding Japan and Poland, where we faced specific headwinds from the impact of excise-driven pricing and the characterizing flavor ban, respectively.

In nicotine pouches, ZYN's Q3 shipment growth accelerated in international markets and reached plus 4% in the U.S. or plus 13%, excluding the special promotional activity of September 2025. This performance was supported by the ongoing rollout of new variants as we invest significantly in the accelerated expansion of our product offer and align the portfolio value proposition over the second half of this year.

We are pleased with the initial consumer reaction and sequential increase in category share, even as we have yet to reach full commercial deployment of the first wave of expansion. We remain focused on further strengthening the brand, building consumer awareness of the expanded portfolio and continuing to invest behind the significant growth opportunity ahead. In e-vapor, VEEV continued its outstanding progress with a step-up in shipment growth to plus 62%. We delivered strong performance across key markets and continue to build our leading position in Europe the primary international profit pool. Our combustible business delivered a standout Q3 performance, exceeding our expectations through a combination of stable volumes, high single-digit pricing and a specific benefit from the restructuring of distribution terms in certain markets.

Volumes were especially resilient in markets where smoke-free alternatives remain unavailable or have limited presence, while the continued strength of our brand portfolio led by Marlboro, supported category share gains and further margin expansion. This is in line with our objective of maximizing combustible value over time to support the growth of our smoke-free business. Our overall year-to-date performance further demonstrates the sustainability of our growth model. We continue to expect another year of high-quality, best-in-class volume, sales and profit growth as we continue to invest behind our leading smoke-free platforms to drive long-term value.

Turning now to our headline financials for the third quarter. We delivered shipment growth of plus 0.6%, outperforming a broadly stable industry despite unfavorable comparisons on HTUs. Together with robust pricing and favorable category mix, this drove organic net revenue growth of plus 7.1% or plus 5.5% in dollar terms to reach $11.4 billion. Gross profit grew organically by more than plus 8%, and adjusted operating income increased plus 10.5% organically and plus 9.6% in dollar terms. This reflects strong top line growth and effective cost management, even as we accelerated our growth investments, notably in the U.S. Adjusted diluted EPS increased plus 5.4% to a new quarterly high of $2.36. This includes an unfavorable currency impact of $0.01 due to dollar strength and lower positive transactional impact than previously expected, mainly due to the strengthening of the Russian ruble. As flagged last quarter, this growth also includes an unfavorable comparison against a low tax rate in the prior year period, which reduced Q3 EPS growth by approximately 4 percentage points.

Our outstanding year-to-date results further demonstrate the strength and quality of our business fundamentals, with shipment volume growth of plus 0.5%, strong pricing and favorable category mix. This drove organic net revenue growth to plus 5.9% or plus 8.2% in dollar terms, bringing year-to-date net revenues to nearly $33 billion. Adjusted gross profit increased by plus 7.1% organically, while adjusted OI grew by 7.7% organically and plus 10.6% in dollar terms, reaching more than $14 billion. We delivered adjusted diluted EPS of $6.52, representing growth of plus 8.4%, excluding currency and plus 11.8% in dollar terms.

Turning to shipment volumes. We achieved solid growth in both the third quarter and year-to-date. Consistent with recent years, the structural growth of our smoke-free portfolio more than offset declines in combustibles, and we are firmly on track to achieve our sixth consecutive year of growth. Smoke-free shipments increased by plus 2.7% in the quarter despite the strong prior year comparison and by plus 6.4% year-to-date, driven by IQOS. We continue to expect high single-digit growth in smoke-free adjusted IMS volumes and shipments for the year, with the latter subject to year-end inventory movements. IQOS HTU shipments reached 41.5 billion units in Q3 with year-to-date growth of plus 6.7%. We now expect HTU shipment growth to be slightly below adjusted IMS growth for the full year, with the Q3 dynamic of adjusted IMS growing faster than shipments to continue in Q4, notably due to the in-year phasing impact of price changes in Japan.

Q3 shipment growth was supported by a wide range of markets, including Germany, Greece, Spain, Indonesia, the United Kingdom, the Netherlands and Global Travel Retail, all of which delivered strong double-digit progression. Oral smoke-free volumes increased by plus 1.8% in the quarter, supported by our readiness and ability to introduce new product variants in the U.S., alongside an acceleration in international ZYN growth and share gains in Swedish snus. E-vapor shipments grew by a remarkable plus 62%, demonstrating the increasing scale and importance of our multi-category portfolio, and VEEVs role within it. Cigarette shipments were flat in the quarter despite strong pricing, outperforming an industry decline of 1.1%.

This reflects both the strength of our brands and the resilience of the category in markets where smoke-free products are banned or have limited presence such as Turkey, Indonesia and Egypt. On a year-to-date basis, cigarette volumes declined by 1.2%. While the markets driving this better-than-expected performance generate an unfavorable geographic mix, the continued resilience of our combustible portfolio means we now expect full year cigarette volumes to decline by a similar level, subject to year-end inventory movements.

We continue to generate strong top line growth from the fundamental pillars of our business model, namely volume growth, pricing power and the mix benefit of smoke-free unit economics. Year-to-date, pricing remained the largest contributor, adding plus 6.2 points of growth. This reflects continued combustible strength with pricing of plus 9.1%, together with a positive contribution from our smoke-free portfolio, including low single-digit pricing on IQOS HTUs. The increasing contribution of smoke-free products in our international business provided a further plus 1.5, I repeat, plus 1.5 points of growth, notwithstanding a lower impact in Q3 due to timing factors. This was partly offset by a 0.6 point headwind from the U.S., driven predominantly by the impact of lower ZYN shipment volumes and challenging comparisons earlier in the year, with these headwinds moderating significantly in the third quarter.

Combustible geographic mix and other factors reduced growth by 1.7 points. These headwinds were partially mitigated in Q3 by the impact of restructuring of certain distribution terms I mentioned earlier, which we do not expect to be significant in the fourth quarter. As a result, year-to-date organic net revenue growth reached plus 5.9% and plus 7.1% for Q3. Currency contributed a further plus 2.3 percentage points year-to-date, bringing reported net revenue growth to plus 8.2%.

Moving further down the P&L, our adjusted operating margin organically expanded by plus 60 basis points year-to-date and plus 130 basis points in Q3, reaching a very strong level of almost 45% in the quarter. Gross margin expansion remained the primary driver, contributing plus 80 basis points in both Q3 and year-to-date, bolstered by strong pricing, favorable smoke-free mix, increasing scale benefits across our smoke-free business and manufacturing productivity gains. At the same time, we continue to invest strongly behind future growth opportunities. While SG&A organically increased by less than net revenues in Q3, this reflects the ongoing benefits of our G&A productivity initiatives and the favorable comparison against the prior year period, which included certain combustible related items.

Both international and U.S. smoke-free commercial investments continued to grow ahead of the top line, accelerating versus the second quarter. For the full year, we expect SG&A to grow broadly in line with net revenues. As we continue to work on our back-office costs while strongly increasing commercial investments behind our growth platforms, and consumer-facing initiatives across the world. This includes increased investments in the U.S. to support our ZYN portfolio expansion and competitiveness. Indeed, our productivity program continues to deliver strong results. We have now generated more than $2 billion of cumulative gross cost savings across both cost of goods sold and SG&A since 2024, achieving our 3-year objective ahead of schedule.

Focusing now on our international business, which continues to be the primary engine of group performance and represents 93% of our year-to-date net revenues. International smoke-free delivered excellent year-to-date results with organic growth of almost 10% in net revenues and plus 12% in gross profit driving plus 120 basis points of gross margin expansion to 70%. This reflects the continued growth and increasing profitability of IQOS with additional contributions from our expanding smoke-free portfolio, particularly VEEV. As expected, Q3 growth was slower due to shipment timing comparisons and related category mix. Importantly, IQOS gross margins continue to expand meaningfully despite additional cost disruption in Ukraine.

Our international combustible business also delivered a strong year-to-date performance. Higher category share, robust pricing and efficient execution drove organic net revenue growth of plus 5.2% and gross profit growth of plus 7.4%, supporting plus 140 basis points of organic gross margin expansion. Together, our international smoke-free and combustible businesses drove plus 7% organic net revenue growth and plus 9.1% gross profit growth with plus 140 basis points of gross margin expansion to 68.8%. This performance supported international organic OCI growth of around plus 11% in both Q3 and year-to-date, comfortably exceeding the targeted OI growth rates for total PMI.

Now focusing on international smoke-free, we drove plus 8.6% growth in total adjusted IMS year-to-date, including an acceleration to plus 8% in Q3 and despite the impact from Japan and Poland. Excluding these 2 markets, growth was plus 11.8% year-to-date, consistent with the strong growth rates delivered over recent years. Importantly, our smoke-free portfolio continues to outgrow the comparable industry by approximately 1 percentage point, with our share increasing to 62%, reflecting the increasing strength of our multi-category strategy. I also note that our international market share of cigarettes and HTUs exceeded 30% in the quarter for the first time, underscoring the combined strength of our smoke-free and combustible portfolios.

IQOS remains the driving force behind our smoke-free growth. Adjusted IMS volume growth accelerated from plus 5.1% in Q2 to plus 7.1% in the third quarter. We are especially pleased with the delivery of plus 7.7% growth year-to-date despite the known headwinds in Japan and Poland. Excluding these 2 markets, adjusted IMS growth remained around plus 10% in the quarter and almost plus 11% year-to-date. Consistent with the strong underlying trajectory of the business, and the durability of demand across our geographic footprint.

Key European geographies, including Italy, Greece and Spain, all delivered double-digit adjusted IMS growth year-to-date, complemented by excellent performance in markets such as Indonesia, Mexico, the Philippines, Saudi Arabia and Taiwan as well as Global Travel Retail, highlighting the increasing geographic diversification of our IQOS business.

Our device and consumables pipeline remains active, supporting both legal age consumer acquisition and brand loyalty. We continue to enrich our premium and LEVIA HTU offerings with new taste experiences. Our mainstream price variants of DELIA and SENTIA are also supporting acquisition and exceed the size of our closest category competitor. In addition, the expansion of our alternative heating technology BONDS by IQOS is ongoing and is resonating well with harder-to-reach entrenched smokers in initial launch areas. The strength of IQOS is exemplified by excellent key city offtake share progress across the world, a strong indicator of national level growth potential. We recorded further strong Q3 share gains across established IQOS markets, including Germany, Greece, Italy, Japan, Romania, the Netherlands and the United Kingdom alongside global travel retail.

We also continue to see very promising momentum in newer growth markets such as Mexico, Indonesia and Taiwan, in which IQOS increased its national category share to more than 80%.

Switching to VEEV, whose momentum remains very strong. Year-to-date shipment volumes increased by plus 68% to 4.0 billion equivalent units. This includes continued gains and increasing category leadership across European markets, with VEEV further extending its lead over established competitors as the #1 closed pod brand in the region. Elsewhere, we continue to see promising growth in markets, such as Egypt, Malaysia, Global Travel Retail and in South Korea following its recent launch.

The business continues to benefit from our unique multi-category deployment using the unparalleled commercial infrastructure and consumer reach of IQOS, while also benefiting from the structural shift towards closed pod systems across international markets. This trend aligns with our portfolio and commercial strategy as we drive momentum with meaningful innovation, such as the current rollout over new beautiful VEEV One Plus device, which you can see here on the slide.

Moving now to ZYN, which continues to generate promising growth in international markets as we invest to build the category. Year-to-date, international shipment volumes reached 1.5 billion pouches, representing growth of plus 6.3% on a like-for-like basis. This includes a sequential step-up of plus 7% in Q3, supported by improving sequential trends in Sweden following the launch of new ZYN flavor variants. Strong double-digit progression continued in markets such as Poland, Global Travel Retail and Mexico, partly offset by inventory movements in the United Kingdom and Pakistan. Growth was supported through portfolio innovation, such as ZYN Black Menthol, continued category expansion and growing consumer adoption across a broad range of markets. ZYN's year-to-date ex Nordics IMS growth reached plus 30%, outperforming the industry and growing ahead of shipments.

In Europe, our most advanced multi-category region, combined smoke-free IMS volumes for IQOS, ZYN and VEEV increased by approximately plus 8.6% year-to-date and plus 8.9% in Q3, reflecting strong momentum. IQOS adjusted IMS growth strengthened to plus 6% in Q3, notably driven by an acceleration in Germany and Spain. Performance was broad-based across the region, with strong growth continuing in Italy, Greece, the United Kingdom and Bulgaria more than offsetting the impact of disruptions in Ukraine. Excluding headwinds in Poland due to the characterizing flavor ban implementation earlier this year, adjusted IMS growth in Europe was around plus 8%.

Our other smoke-free categories continue to scale rapidly. VEEV shipment volumes increased by plus 75% year-to-date and plus 66% in Q3 with outstanding growth in Romania, Greece, Germany, France, Bulgaria and Spain. ZYN volumes reached 1 billion pouches year-to-date, accelerating to almost plus 6% growth in Q3 on a like-for-like basis as we invest behind the category. This was supported by strong progress in markets such as Poland, Austria and Finland in addition to the better Swedish delivery.

In Japan, IQOS fundamentals remain strong amidst the volatility of the 2-step excise increase on heated tobacco this year. Following a Q2 decline in adjusted IMS volumes due to pantry deloading, HTUs returned to growth in Q3 with an increase of plus 3.4%. As in Q1, before the April excise-driven price increase of JPY 40 per pack, Q3 IMS growth includes a favorable impact from consumer pantry loading ahead of our JPY 20 increase in October. Excluding this impact, underlying growth was plus 1.3% as consumers gradually adjust to higher prices in an environment where combustible cigarettes did not yet face any excise change. This remains in line with our expectations and we continue to expect growth for the year, notwithstanding a likely softer Q4 as pantry loading, again, reverses and consumers adapt to a further price increase.

Our adjusted heat-not-burn category share remained stable at approximately 68% despite taking more pricing than competitors in April, highlighting the strength of the IQOS proposition. Looking forward, the excise calendar for the next 3 years looks less disruptive with moderate increases on both combustibles and heated tobacco like each April. While the April 2027 increase will mark the third change in 12 months, with a potential cumulative impact on the consumer, we remain excited about the category's midterm growth potential in Japan. Although heated tobacco continues to account for over 50% of total nicotine offtake, there remains a substantial pool of smokers yet to switch, supporting our confidence in the capacity for strong IQOS performance in the years ahead.

And turning now to the U.S., where we delivered strong performance in Q3, supported by ZYN volume growth of plus 4.2% to 3.2 billion pouches or plus 13%, excluding the impact of one-off promotions in September last year. Sequentially, shipments increased by 10% versus Q2, reflecting category expansion and the ongoing launch of new portfolio variants, which have contributed to an improvement in our category share and should position us well for future growth. We expect Q4 shipment volumes to be broadly in line to modestly above Q3 levels as we continue to expand distribution and support the rollout of the enhanced portfolio.

U.S. net revenues increased by almost 23% and gross profit by plus 24%, with gross margins expanding organically by plus 60 basis points to 64.4%. This was supported by favorable pricing comparisons against the same prior year promotions, notwithstanding the impact of higher manufacturing overheads and start-up costs from our new ZYN facility in Colorado, which is gradually ramping up production. Adjusted operating company income grew by plus 1.5% as we meaningfully increased commercial investments to support the expansion of our ZYN portfolio.

Supported by our readiness and ability to launch new products, we are taking significant actions across the second half of this year to strengthen ZYN's competitive position as the leading and premium U.S. smoke-free brand. The first action is the expansion of the ZYN offering in two ways, to address a broader range of legal-age nicotine consumer preferences. The first wave of expansion comprises the higher nicotine moist range of ZYN Ultra and an expanded flavor lineup for our flagship dry portfolio, which are now approaching full distribution.

While we are still building consumer awareness around our new range, especially for ZYN Ultra, we are encouraged by the initial consumer reaction. Indeed, following several quarters of volume progress below the category growth rate, ZYN's category offtake share increased by an estimated 1.4 points from June to September, demonstrating the incremental contribution of the new variants and interest from competitor pouch consumers.

We also began shipments of the second wave of product introductions in the quarter, with new flagship variants in both 1.5 and 8-milligram strengths, further broadening the consumer offer and supporting our objective on the encouraging legal age nicotine users to switch to the category.

The second important action is to align the value proposition across the portfolio and optimize ZYN's per pouch price positioning. We began this process over the summer with the launch of ZYN Ultra in 20 pouch cans. And starting in October, we are now transitioning our 1.5, our 3 and our 6-milligram flagship variants from 15 to 20 pouches. These variants represent a large majority of our volumes. And as we work to execute the change smoothly for both consumers and trade partners, we expect the transition to be largely complete in the fourth quarter.

As we flagged that Q2 earnings and subsequent communications, these actions are accompanied by an H2 step-up investments. Total U.S. segment SG&A increased significantly to around $370 million in Q3, and we expect a further exceptional sequential increase of around 10% in Q4. This reflects increased consumer communication to build awareness of the expanded portfolio and enhanced value proposition, together with the ramp-up of our When It Clicks brand campaign. Looking beyond Q4, we view the Q3 level of spend to be sufficient to support the brand.

The transition to 20 pouch cans represents a significant investment in consumer value, which all else equal, translates into approximately 25% less revenue per pouch. Combined with additional short-term support on the existing 15 pouch variants to manage the sellout at retail, this will impact Q4 net revenues. Indeed, taking the aggregate impact of these actions and the expansion of our manufacturing capacity to support future growth, Q4 will be a unique quarter of investment. We expect an abnormally low level of U.S. profitability in the fourth quarter with adjusted OCI around 0 or slightly negative. Our leading global position and strong growth profile reflects continuous investment for mid- and long-term growth, and we are excited to be implementing the significant improvements towards ZYN consumer offer. With a fast-growing category in ZYN's leading brand equity, we believe we are positioning the brand for strong and sustainable growth over the coming years.

And finally, turning to combustibles, which posted an exceptional Q3 performance. Pricing remained a key driver, reaching plus 8.9% and in the third quarter and plus 9.1% year-to-date with broad-based contributions across markets, including Turkey, the Philippines, Indonesia and Poland. We now expect full year pricing of above 8% with the net revenue impact, partially offset by a more unfavorable geographic mix. Despite this strong pricing, our portfolio increased Q3 international category share by 0.4 points to 25.9%, driven by Marlboro, which reached an all-time record high of 11.4%.

The strong share performance and robust pricing drove another quarter of excellent profitability, with international combustible gross profit increasing by plus 9.8% in Q3 and plus 7.4% year-to-date. And this brings me to our outlook for the full year, where we're targeting a second consecutive year of double-digit adjusted diluted EPS growth in dollar terms. Indeed, following our strong first 9 months, we are on track for another year of excellent performance as we continue to invest behind smoke-free growth. We now expect growing total shipment volumes for the year making 2026, our sixth consecutive year of growth. For net revenues, we continue to forecast plus 5% to plus 7% organic growth. Moreover, given the strong year-to-date delivery and our expectation for a robust fourth quarter led by international smoke-free, we believe the business could deliver in the middle or upper half of this range.

At the operating income level, we continue to expect organic growth of 7% to 9%, reflecting strong inherent margin expansion from our top line performance and productivities, and despite our substantial ongoing investment in [ SFP ] internationally and in the U.S., our forecast range for currency-neutral adjusted diluted EPS growth also remains at 7.5% to 9.5%. With a favorable currency impact at prevailing exchange rates of approximately $0.18, notably including recent weakness in the euro. This results in an adjusted diluted EPS range of $8.29 to $8.44, representing growth of approximately plus 10% to plus 12% in dollar terms. However, considering the significant H2 step-up in U.S. investments and the cost impact of ongoing geopolitical tensions, we see the full year delivery more likely to be at the midpoint or lower half of both brackets.

Although the inflationary outlook remains uncertain, most notably, the persistence of energy-related inflation linked to the conflict in the Middle East. The prices of certain inputs have come -- have begun to reflect the increases in energy and shipping costs. While we are less exposed than many other areas of consumer goods and this remains manageable overall, these factors were a headwind in the third quarter and are expected to evolve further in Q4 as a greater proportion of increased input prices flow through. Overall, we estimate the impact on full year adjusted diluted EPS growth to be around 0.5 percentage point in addition to a similar sized headwind from disruptions in Ukraine.

This results in a combined impact of approximately 1 point of growth for the year. For Q4, more broadly, we anticipate a strong net revenue and OCI performance from our international business, including a reacceleration in smoke-free performance. We expect continued robust adjusted IMS growth and HTU shipment volumes of 39.5 billion to 40.5 billion units, consistent with our comments on shipment phasing. In contrast, this will be a unique quarter of elevated investment and portfolio transition for the U.S. for the reasons I explained. Despite this special quarter for the U.S., we expect a strong delivery for the group overall as captured in our full year outlook.

We also expect to generate a record level of approximately $13.5 billion in operating cash flow, a testament to our strong cash flow generation. This provides substantial flexibility to invest behind future growth while continuing to deleverage and deliver attractive shareholder returns.

So let me now conclude with a few key takeaways. Our year-to-date performance reflects the quality of our underlying fundamentals, positioning us for another year of superior top and bottom line growth as we continue to invest substantially behind future opportunities. This reflects the durability of our model supported by category-leading brands, strong pricing power, disciplined cost management and the increasing scale of IQOS ZYN and VEEV.

We remain a highly cash-generative business with an unwavering commitment to our progressive dividend policy and to rewarding shareholders. In September, we raised our dividend for the 19th consecutive year to $6.40 per share with another increase of almost 9%. Looking ahead, we remain confident in our mid- and long-term trajectory, which reflects the unique strength of PMI's growth model. structural smoke-free momentum built on science, innovation, commercial strength and brand building, allied to combustible resilience and effective reinvestment. We look forward to sharing more on these elements at our next Investor Day, which we plan to hold in Q2 next year.

Thank you very much for listening, and we are now happy to answer your questions.

Operator

[Operator Instructions] Our first question will come from the line of Bonnie Herzog from Goldman Sachs.

質疑応答

Bonnie Herzog

All right. I guess my first question is on your guidance. Your Q3 came in better on both the top line and EPS versus your guidance for the quarter, yet as you mentioned, you're pointing to the middle or lower half of your full year organic op income growth guidance, and it sounds like on your EPS growth guidance as well. I know you called out the higher cost pressures from the ongoing geopolitical tensions. But I really did want to verify if you're also now planning on spending more in the U.S. For instance, are you finding that it's now costing you more to implement some of the strategic initiatives that you've called out such as putting 20 pouches and all ZYN cans? And then how should we think about some of these higher costs and spending in the U.S. on your profitability and EPS growth next year?

Massimo Andolina

Thank you very much, Bonnie. Nice to hear from you. So you're right. So our guidance points for the OI and for the EPS for the full year towards the mid or lower half of the range. And as you could read the predominant element that we have in there, there are 2 predominant elements fundamentally. One is the cost pressure that is coming from geopolitical elements. This cost pressure has been increasing over the year, and we start feeling more the impact of that during Q3 and Q4. We guided you to a full year impact of 0.5 of EPS, you could read that, therefore, the flow in is mostly in H2. And we guided you to another 0.5 that is coming from disruptions, which are kind of one-off things that have happened in Ukraine due to sadly 3 events of bombing of some of our supply chain facilities and therefore, destruction of goods.

Now quite frankly, if you look at that and you look at our guidance, that constitutes one point. And it means that just that one, if we had not had those impacts, we would be mid- to higher half of the range. And the other important element that there is in the quarter and especially in Q4 is the exceptional level of investment that we are making in the U.S. I assume you will all acknowledge that the investment we are making in the U.S. over the course of Q3 and Q4 is exceptional by all means. And I would point you out to a couple of elements in that.

First and foremost, the fact that we are moving our flagship portfolio to an optimized premium price positioning, which de facto means a better value proposition for the consumers. And in practical terms, it means a 25% price reduction on a per pouch basis. So we are migrating our entire flagship portfolio from 15 to 20 counts at the price of the 15 cans. That alone, as you can understand, as an impact on the revenue line of it. As we go through a phase of transition over the course of Q4, we will accompany that with commercial activities at retail level, which are revenue line impacting activities in order to ease the sell-out of the remaining 15 cans in the market.

And the third step that we take is an exceptional investment that is already flowing in Q3 and we guided to a potential increase over Q4 exceptionally by 10% versus the Q3 impact. So we said about $370 million in Q3 and a 10% increase exceptionally in Q4 in order to continue to do a couple of things. The first one is continue to build ZYN into the strongest smoke-free brand in the U.S. And the second element is we have practically tripled our portfolio of variants of nicotine pouches over the course of the year. And we are making this value optimization in terms of price adjustment. And therefore, we want to step up both branding communication with When It Clicks campaigns and continue to expand that.

But at the same time, we want to do something very important that is continue to build the awareness of consumers around the existence of these new variants, but also the awareness on the new price of the product. You should interpret all these elements as elements that for Q4 are going to be even ramped up versus Q3. But as we said in the guidance, you could assume that the Q3 level of cost would be a good proxy for what the level of commercial investment is going to be over the course of next year.

So when you put all of these things together, Bonnie, quite frankly, I see strength in the guidance that we are giving for the bottom line and for the EPS in that we're moving it to the mid and bottom half of the range just for the correction of the cost that I detailed before, and we are de facto almost absorbing the strong investments that we're making in the U.S. supported by the strength in all the rest of the business. In other words, if it were not for those inflationary pressures, which we have felt to a much lower extent from what I'm seeing in the disclosures of other FMCG companies in the areas, we have felt to a much, much more manageable level than many other companies. If we were not for those, we would actually be in the mid- to upper end of the range.

I hope I addressed your questions.

Bonnie Herzog

No, definitely, that was helpful. And just to confirm, Massimo as I think about next year, the spend levels in the U.S. this year, I think about that continuing next year. Did I hear that correctly?

Massimo Andolina

I think what we guided towards is the fact that the spend level that you are seeing in Q3 is a good proxy for the run rate that we're going to have next year. In Q3, consider that there is another element, which is a higher cost. That is the fact that we have just started up our Colorado facility. So the level of loading in that facility is low and therefore, the impact from the overheads there. So you're going to find yourself next year with kind of a cost level where Q3 is a good proxy and obviously, we are banking on the future growth of the category next year, and we are bolstered by the share results that we have seen from June until now.

Bonnie Herzog

Okay. And yes, maybe just a couple of quick follow-ups on ZYN because you touched on it. So I'd be curious to hear from your perspective, how some of the recent ZYN innovations that you've rolled out have been performing relative to your internal expectations? And maybe ultimately, how incremental do you think the innovations will be to flagship ZYN? And then second, on the move to 20 pouches in each of the ZYN can, I'm curious how you see this impacting consumer behavior, if at all, for instance, do you see it, I don't know, as a headwind to volumes? Or could it be a possible tailwind if consumers now consume more since they have more pouches in each can they buy? Just kind of trying to think through that.

Massimo Andolina

So we're very excited with the initial results of both the expansion of flavors on our flagship dry portfolio and the introduction of the higher nicotine levels of 9 and 11 in our Ultra portfolio. I must tell you that the feedback that we have gotten from consumers, and I had the opportunity a couple of weeks ago to be in the U.S. and do a deep dive on that, has been overwhelmingly positive. And this includes both existing ZYN consumers that we're really looking forward to having more flavor options at the 3 or 6 levels that they were used to. And the feedback on actually those flavors of dry have been really super positive. But also consumers that were wondering why ZYN did not have a higher nicotine level proposition and that might have otherwise considered going to competition.

Quite frankly, in data that we have seen from our consumer research, we see that there has been high interest in what we have launched. We have seen a inflow, both of legal aged smokers that are coming to the category, but also of competitors, users and people in the case of 9 and 11 that had left ZYN to go to competitors' propositions in higher nicotine levels and who have come back into ZYN, thanks to those launches.

So we see all of that in the share. As you see, the share is positive since June and since we started these launches. And therefore, I can only imagine that with the adaptation at this point of the price premium, we should be seeing even more competitiveness and more strength going forward.

Regarding your question on consumer behavior, well, Bonnie, let's wait and see I can tell you my personal experience. When I have more in the pocket, I tend to consume more. I say it with my kids when they buy juices and other things. The more you have in the fridge, the more you take. So we can only assume that that's going to be the case. There is one thing that I will comment on, however, from my experience in international, as consumers come into the category and get used to it and they stay with the category, we see 2 things happening. Consumers tend to trend up a little bit on the nicotine. But as they stay in the category, their average daily consumption tends to trend up. You may argue that in the U.S. today, where the category is at its beginning, you are probably in the low single digit in terms of our average daily consumption. If you go to markets where the category has been present for longer, you're actually seeing more high single-digit day consumption. So that is another element of category growth that we can all look forward to.

Operator

And our next question will come from the line of Matt Smith from Stifel.

Matthew Smith

I wanted to follow up on your inflationary comments and the impact. You called out the 0.5 point of drag on EPS for the year. with some impact in 3Q and higher in 4Q. So if you just isolate the fourth quarter, should we think of that as over a 1 point drag on profit? And how do you view levers to offset the impact going forward you realized your cost savings target ahead of schedule and pricing has run above historical levels. But how do you view both of those now going forward?

Massimo Andolina

Thank you, Matt. Well, let's, first of all, say 1 thing. This is a very volatile situation that this inflation is coming from because it's coming from geopolitical conflict predominantly in the Middle East that is driving energy prices up and, therefore, a variety of inputs and services. And as we have showed in the past, -- we have a certain resilience in our supply chain. In fact, despite the fact that the conflict has been lasting also for the first half of the year, we're only seeing these elements of cost flowing more meaningfully into our P&L in the second half of the year. I'm not going to guide you on the precise split of those elements across the various quarters. but the Q4 is probably the quarter in which we are feeling it the most purely from a timely perspective because there can -- those higher-priced inputs are coming in now.

What I would tell you is we have been through this before. You may remember at the time of the beginning of the war in Ukraine, and we have showed repeatedly the resilience of our model and our ability to mitigate those costs quite frankly, you're seeing it now again because when you compare our 0.5 point that we're guiding for this year, to what is being driven by -- to what is being guided by many of our other peer companies, who operate in the area, you see significantly higher impacts from that, which is testament to the resilience of our supply chain and the fact that we have broadly sourced set of materials that come from all over the world and therefore -- and also contracts, which protect us over a period of time, that will allow us to navigate this.

Having said that, all of those protections cannot last forever. The situation is very volatile in the same way as it is impacting now it may disappear at the moment that the conditions on the ground go back to normal. And to your last point, look, we have demonstrated this year and also in previous years that we have very strong pricing power, and we are entering 2027 with probably a super strong P&L at this point and balance sheet, by the way, as well. with margins expanding at gross level, at operating income level. You have seen that year-to-date, we've expanded 80 points the margin at gross level and 60 at operating level.

So we're entering 2027 strong and therefore, in an excellent position to be able to manage those impacts should that move forward.

Matthew Smith

And if I could ask a follow-up. You changed your guidance a bit for the heated tobacco IQOS shipment versus in-market sales growth guidance. I think now you expect shipments to slightly trail IMS. Can you talk about the -- or give more detail on that gap? And how do you view inventory levels as you're exiting 2026? Are those at a normal level? Or is this gap and opportunity to further catch up as you go forward?

Massimo Andolina

Thank you for that question, Matt. Look, we have to take the fact that 2026 has been a bit of a peculiar year for [indiscernible]. There has been especially one event, there has been this taxation and therefore tax-driven pricing in Japan, not once but twice. And therefore, a variety of preparatory steps for that unprecedented event took place both last year when -- in the end of the year, the shipments were higher. Exactly for us to prepare for pantry loading that happens from consumers that are not used to that level of price change, both at retailer level and a consumer level.

So you saw that there is a phasing of shipments where we have significantly higher shipments in the first half of the year in H1 and lower shipments in H2. When you look at what we just showed, you saw that -- the trend in IMS also reflects the pantry loading in Japan. And given that our April pricing was a JPY 40, but our October pricing is of JPY 20. We're seeing obviously less pantry loading from the consumers, given the smaller increase that is happening in the second half of the year as we are seeing and as we saw in the first half of the year, since we entered H2 well equipped from a shipment level and therefore, with the phasing of shipments, IMS are going to run ahead slightly of shipments, and therefore, you will see inventories coming down, but always at a very healthy level. And therefore, we also take the benefit on the working capital side.

Operator

Our next question will come from the line of Eric Serotta from Morgan Stanley.

Eric Serotta

Great. First, could you talk a little bit about puts and takes for international smoke-free growth next year, realizing you're not going to give me -- give us guidance today. But clearly, this was a -- '26 was an extraordinary year. You talked about some less unfavorable or a more normal tax environment in Japan next year, you'll be cycling the flavor ban in Poland. Any other big considerations to keep in mind as we start to think about international smokefree IQOS next year. I know there's a tax changes in Germany, much smaller than Japan, but I believe impacts HTUs, but anything more broadly in terms of puts and takes for next year for IQOS internationally?

Massimo Andolina

Thank you very much, Eric, for the question. Well, look, I'm not going to provide guidance for next year. We're going to talk about that 1 in February. But as you said, puts and takes, so I'll give you my take on this. So my first take that I would give is if you look at our IQOS performance over the course of the year, we have displayed that there is strong momentum in terms of IMS, of IQOS. And the thing that I would remark here is that the geographical base over which that growth is spread is becoming wider and wider. So you saw that we presented year-to-date 7.7% adjusted IMS growth. If you take out the impact from Japan and Poland, we are at 10.8% IMS growth.

You could compare that with 2025, which was at 10.6%, which means that you see that the momentum is there and is actually increasing, and this increase is also related to the fact that there are more and more markets that have double-digit growth in IMS and sizable markets. You have in double digit at this point, Italy, Greece, Spain, the Netherlands, the United Kingdom, Germany, many of these markets were not markets that were on the list previously, meaning these were markets where we started investing a few years ago and where we're seeing the results coming.

We're seeing Indonesia with excellent growth, Mexico, South Taiwan, where we have captured more than 80% of the share in the category. GTR, Global Travel Retail that continues to contribute positively. So you see that the momentum from an IMS perspective, when you take out those onetime events of Japan and Poland is there, and the geographic diversification of the growth gives me confidence for the resilience of that growth. Now the Japan event of this year, I would say that was a little bit atypical because you have asymmetrically only 1 category that takes a pretty important tax and price increase.

If you look the price increases that we had to pass on the IQOS consumables alone, we're looking for the Japanese consumer that is not used to seeing price increases. -- over a 10% price increase over the course of 1 year with the cigarettes not moving. So now that we move into next year, and you have a JPY 12 increase across the board for HTUs and for cigarettes. You may argue that, that is a more progressive increase and something by which there is going to be less of a shock wave for the category itself.

And then the other thing that I would ask you to consider is that at this point, we have launched also our new proposition that is BONDS and BLENDS in a variety of markets. including, by the way, in some of the prefectures in Japan. And you remember that 1 of the elements that we wanted to really crack, especially in a place like Japan, where you have more than 50% penetration of the category among nicotine users is for those that are still entrenched that haven't moved yet, what is the proposition that may actually encourage them to move. And we're at this point with BONDS and BLENDS in a number of markets, the proposition is actually doing and we see that the consumer feedback tells us that the proposition as what we wanted it to do, that is it's managing to convince entrenched smokers to actually because they find the more similar experience the cigarettes in BONDS and BLENDS that they're looking for.

And therefore, we are seeing less or fewer HTU users move to BONDS and BLENDS. They actually has too strong for me, but more smokers moving there, meaning it's working exactly as we want. We're at the beginning of that journey, I cannot but be just encouraged by what I'm seeing. And then I will say one last thing. My answer has already been long, but we are starting to see also some new markets opening up. We saw Taiwan that opened up last year. And you see what a quick run we have had in Taiwan, where the business is growing strongly, and we have become absolutely the category leader in the category ahead of the traditional leading player in the CC business there.

And more recently, you have seen regulatory changes in Argentina, which is a positive step towards the ability next year to be able to enter the market in Argentina as well, which means that there may be more markets that come on board. It's not a matter of whether on whether they're going to come on board. It's not a matter of when. So how are sentiment towards the trajectory for HMB remains extremely strong, Eric.

Eric Serotta

Great. Very thorough and very helpful. One quick follow-up. Realizing pricing has never been the primary lever for IQOS growth. It's really mostly about driving penetration. It does seem like the price mix or the implied price mix in international smoke-free was a little bit softer this quarter. I think it ran about 3.5% in the first half, closer to I get like 70 basis points in the third quarter. Just wondering what's happening there? Is it simply the comparisons from last year? Is it some geographic mix? Is it product mix with BONDS by IQOS. Just wondering what happened in the quarter and how to think about price mix for international smoke-free going forward.

Massimo Andolina

Excellent question, Eric. So there are 2 things that I would mention when it comes to the revenue growth of IQOS in the quarter. Two things to keep in mind. The first 1 is, it's obviously hit by the comparison on the shipments versus previous year. And you saw that our shipment volume in total [ SFP ] was at 2.7% growth, which is a lower level of growth that you have seen in previous quarters and quarters and obviously being IQOS, such a large part of our smoke-free portfolio the comparison of IQOS shipment volumes is the 1 that is actually holding that down because you have seen excellent growth in the other 2 categories.

There is a second element to consider there is, therefore, category mix within that when you want to take that to revenues. And 1/3 element there is -- there have been certain pricing decisions, timing of certain pricing decisions, especially in IQOS that have been made and which have hit the quarter, and that's all, but nothing else on that, that there's any concern to us.

Operator

And our next question comes from the line of Pallav Mittal from Barclays.

Pallav Mittal

So the first one is on ZYN and Ultra. And clearly, there have been some concerns around the pickup in volume over the last couple of months. The EBIT this quarter in the U.S. is growing only 1.5% on a very easy comp. And for Q4, you were saying it would be 0 or slightly negative. Given that the investments will continue into next year, is it fair to assume that the U.S. EBIT would decline next year?

Massimo Andolina

The U.S.? Can You repeat the last...

Pallav Mittal

The EBIT in U.S. would decline next year?

James Bushnell

Pallav, sorry, your line is not very clear, but I think you're asking about U.S. EBIT for next year .

Massimo Andolina

Okay. Look, as I said before, I'm not going to provide guidance for next year here. I can provide some considerations for you to make your own conclusions on it. You have seen that we have now nicotine pouch volumes that have grown quarter-on-quarter for the past 3 quarters, and we guided over the performance in Q4. You know that we are bold about the category going forward. And we said there's going to be in strong double-digit growth going forward. And you have seen our share performance. Quite frankly, we also guided and I explained that in the question before from Bonnie on the cost level that you can expect for next year and taking Q3 as a good proxy for the run rate for next year.

And therefore, you can assume that with volume growth continuing, from the category from our ability to retain an increased share. The absorption of those costs is going to be better, including the investment that we have made in Colorado for the manufacturing facility. And therefore, you can derive what the possible trajectory for the EBIT is going to be. One thing to keep in mind is the fact that obviously, the 25% price optimization that we are making in Q4 will have a lagging effect for 3 quarters on the revenue level, but on a growing volume.

So that's what I would keep in mind, and then we can provide better guidance when we talk again in February.

James Bushnell

And Pallav, your line is very unclear. So I'm afraid we'll have to move to the next question. Please do contact us if you have a follow-up to that.

Operator

Our next question will come from the line of Andrei Andon from Jefferies.

Andrei Andon-Ionita

Massimo, James, it's Andrei Andon from Jefferies here. Two quick ones for me, please. First of all, in Germany, we've had this law that means excise taxes will increase much more sharply in the next 4 years. it was passed last week. How do you expect this to affect combustibles and heated tobacco in Germany in terms of volumes and pricing ability in 2027 and beyond. And then the second question, we've had this shipment growth for ZYN in the U.S. just over 4% year-on-year in Q3. It does seem like it's fairly ahead of third-party scanner data, which seems to suggest volumes down mid-single digits in Q3. Is this due to a restocking benefit? Or are there any other factors that would help explain this difference?

Massimo Andolina

Thank you very much, Andrei. So I will start from the Germany question. I mean, as you know, we operate across a variety of countries around the world. And this is not the first time that we find ourselves confronted with higher than usual taxation passed in 1 time. I mean if you look at the recent past, similar events of actually higher magnitude that happened past couple of years in Belgium, in the Netherlands, 2 years ago in Poland, more recently in India, in Mexico. So we are actually quite well versed to deal with events like this one. Now the German government came with a higher-than-usual tax pass on because now it's ranging between $0.83 and $0.88 I understand starting on January 1. And I would point you, Andrei, to certain positive elements of this, which are the following.

First and foremost, the differential with HTU has been retained. And therefore, HTU retains a tax advantage versus the underlying cigarette tax. The second element that I would bring you to is it is a market where we are perfectly positioned to be super competitive, even in an environment with higher tax that's Germany. We have the strongest brand in the market, which is Marlboro, and Marlboro's equity in Germany is one of the highest that we have in the entire world, accompanied by a few other brands, second to it L&M that is accompanying it. Marlboro and the entire portfolio has been well deployed across a variety of formats including very large stick count packs, but also branded with the launch last year of Marlboro Crafted that has been extremely successful, which means that it allows us to compete at all the various price segments and therefore, to compete very powerfully.

So fair to tell you, is it welcome that the German government comes with a tax increase of that magnitude? No, it's not. Because we know what that trajectory does. We have seen that well in the U.K. We have seen that well in France, in Belgium, in the Netherlands, Fundamentally, it moves more volume to illicit players. And ultimately, the government collects fewer taxes and sometimes the lawful industry collects fewer revenues. But if there is one company in Germany that is well versed to compete in that environment, that is us, thanks to the portfolio that we have and the strength of the brands that we have.

And at this point, I would say, with cigarette prices going up, yes, the HTUs are going to go up but by a lesser extent given the tax differential. And we're going to continue to be focused on the growth of IQOS in Germany, which, as I said before, is recording double-digit IMS growth this year, and that is, for us, super important.

I'll come to your question on the ZYN growth. Andrei, if I may ask you to clarify your question on the ZYN growth again, please.

Andrei Andon-Ionita

It's just that the report and ship number, the just over plus 4% in the U.S. on volumes. That seems to be ahead of the scanner data that delta is explained by a degree of restocking? Or are there other factors in play that would explain this difference?

Massimo Andolina

Well, what I can tell you is this is the shipment data that we have. So we're growing 4.2% and in the quarter. And actually, what you can consider is that if you consider the comparison to the fact that in September last year, -- we had the nicotine pouch promotion that hit the month of September. We are actually removing that unfavorable comparison growing 13% in the quarter, net of that comparison.

So that is maybe the element that you may want to keep in mind in order to reconcile your figures. The second thing that I would point out to you is that, obviously, in the quarter, there is the rollout and pipelining an increase of distribution of our new variants and the flavors on the dry portfolio and the launch of the Ultra variants. So over the course of the quarter, there was obviously increase of distribution. We believe that for those variants, we are now fully covered in terms of distribution. We're now building the 1 for 1.5 million but those obviously contributed to the growth of shipments for us in the quarter.

Does that address your question, Andrei?

Operator

Thank you. That's all the time we have for Q&A today. I would now like to turn it back over to management for closing remarks.

James Bushnell

Thank you very much. Sorry, if we didn't manage to address everybody's question. Please do follow up with the Investor Relations team. That concludes our call today. Thank you for joining us, and have a great day. .

Operator

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone, have a great day.