Nicholas Rolli - Vice President of Investor Relations & Financial Communications Hermann Waldemer - Chief Financial Officer and Executive Vice President

Thilo Wrede - Crédit Suisse AG Judy Hong - Goldman Sachs Group Inc. Christopher Growe - Stifel, Nicolaus & Co., Inc. Thomas Russo - Gardner Russo Christine Farkas - BofA Merrill Lynch David Adelman - Morgan Stanley Jonathan Fell - Deutsche Bank AG Adam Spielman - Citigroup Inc

Good day, and welcome to the Philip Morris International Second Quarter 2010 Earnings Conference Call. [Operator Instructions] I will now turn the call over to Mr. Nick Rolli, Vice President of Investor Relations and Financial Communications. Please go ahead, sir.

Welcome. Thank you for joining us. Earlier today, we issued a news release containing detailed information on our 2010 second quarter results. You may access the release on our website at www.pmi.com. During our call today, we will be talking about results in the second quarter of 2010 and comparing them with the same period in 2009, unless otherwise stated. References to volumes are for PMI shipments, industry volume and market shares on the latest data available from a number of internal and external sources. Net revenue data excludes excise taxes. Acquisitions for the purposes of this presentation also include our business combination with Fortune Tobacco Corporation in the Philippines. You'll find data tables showing how we made adjustments to net revenues and operating companies income, or OCI, for currency, acquisitions, asset impairment and exit costs, free cash flow calculations and adjustment to earnings per share or EPS, as well as reconciliations to U.S. GAAP measures at the end of today's webcast slides, which are posted on our website. Today's remarks contain forward-looking statements and projections of future results, and I direct your attention to the forward-looking and cautionary statements disclosure in today's presentation and news release for a review of the various factors that could cause actual results to differ materially from projections. It is now my pleasure to introduce Hermann Waldemer, Chief Financial Officer. Hermann?

Thank you, Nick, and welcome, ladies and gentlemen. I'm pleased to report that we had another strong quarter, with results in line with the business expectations that we shared with you during our Investor Day last month. At that time, we announced a reported diluted EPS guidance for 2010 of $3.70 to $3.80 based on the same prevailing exchange rate. Since then, concerning surrounding the future of the eurozone have calmed somewhat, and the euro has therefore strengthened against the U.S. dollar. Based on the currently prevailing exchange rates, we expect to achieve a reported diluted EPS for 2010 of $3.75 to $3.85. This guidance represents a strong growth rate of 16% to 19% compared to $3.24 in 2009 and approximately 14% to 17% excluding currency. Let me now turn to a brief review of our quarterly results. Cigarette volume in the quarter was 241 billion units, up by 8% on a reported basis and by 0.3% excluding the additional 17.2 billion units generated by our business combination with Fortune Tobacco Corporation in the Philippines. Our shipments in the quarter were also boosted by the buildup of stocks at our distributor in Japan. At the end of June, the inventories at our distributor in Japan were approximately 3.4 billion units higher than at the same time last year. We expect these stock levels to be sufficient to meet the forecasted higher demand from retailers and consumers ahead of the October tax and price increases. The depletion of these stocks will result in a significant reduction in shipments to Japan in the second half of this year. Finally, we expect the revaluation of inventory sales by our distributor to benefit our income during the fourth quarter of 2010. Our volume performance in the quarter was achieved thanks to our superior and broad brand portfolio. The volume of our top ten international brands increased by 3.6% helped, of course, by Japan. Not surprisingly, in the current economic environment, our low-priced brands have performed particularly well. In addition, our key premium and mid-priced brands are also performing solidly. Parliament achieved a volume growth of 2.3% in the quarter, with Japan, Korea and Russia more than offsetting the impact of tax-driven consumer down trading in Turkey. Marlboro volume declined by just 0.5%, as higher volumes in North Africa, the Middle East, Japan, Korea and the Philippines largely offset a decline in the EU region, attributable to a continued challenging environment for premium brands. Chesterfield's vibrancy is confirmed by a 6.2% volume growth in the quarter, despite continued down trading in Spain, one of its key markets. Finally, L&M achieved a favorable volume overall, thanks to growth in Nigeria, Egypt, Germany, Greece, the Netherlands, Slovakia and Thailand, which compensated for volume declines in Eastern Europe and Turkey. Our competitiveness is confirmed by our continued favorable share trends in both OECD and non-OECD markets. I would like, in particular, to highlight our strong performance in Russia. Our market share grew by a further 0.2 share point to 25.5% in the second quarter, thanks mainly to the growth of mid-priced Chesterfield and low-priced Bond Street, as well as the resilient performance from above-premium priced Parliament, the volume of which was up in the quarter. It should be noted that Bond Street is now mostly gaining shares from competitive brands in the same pricing. Overall, in the second quarter, our volume increased by 4.9%, indicating that the total market is stabilizing. Consumer down trading continues to moderate in Russia, as evidenced by the fact that this year's second quarter 3.3% decline in the sales to the trade of PMI premium brands was the lowest in the last 18 months. During the second quarter, we were able to grow our premium volume in several emerging markets, such as Algeria and Indonesia. These economies are generally emerging faster from the economic downturn than those in Europe, where price sensitivity remains high. Increased employment levels remain key to a global resumption of consumer up trading. We are also concerned about the growth of illicit trade in markets that have recently implemented significant excise tax increases, such as Greece, Pakistan, Romania and Turkey. Higher prices in nearly all key markets enabled us to achieve a favorable pricing variance of $341 million in the second quarter. Furthermore, we have just implemented a two-for-three ruble price increase in Russia. We learned from the media last Friday that the Ministry of Finance in Japan has approved Japan Tobacco’s application to amend its retail prices this coming October. The new price list represents increases of between JPY 100 and JPY 140 per pack for Japan Tobacco’s key brands, well above the excise tax pass-on of JPY 82 per pack. PMI’s distributor has also submitted a request to the Ministry of Finance for an increase on PMI brands effective in October and awaits their response. We were more than able to offset the recent large excise tax in Australia and the higher VAT rate in Spain through higher prices. We are pleased that the Italian government has introduced through a decree a reinforced minimum excise tax system. In Greece, if we had fully passed on the tax increases, the price gap between Marlboro and the lowest-priced brands would have expanded from EUR 1.20 to EUR 2.45. This would have rendered the brand completely uncompetitive, and therefore, we were forced to partially absorb these tax increases. Marlboro has nevertheless been under pressure after significantly increasing prices in a difficult economic environment has resulted in consumer down trading and a sharp market contraction. We have, however, been able to largely offset share losses on Marlboro through the relaunch of L&M, which grew to a market share of 6.1% in June. The unfavorable price volume mix variance in Greece was a considerable drag on the EU region's OCI in the quarter. PMI's net revenues reached $7.1 billion in the quarter, an increase of 15.1% compared to last year, and a very robust increase of 5.3% excluding currency and acquisitions. Our exit cost management and productivity saving programs are being used to offset the previously communicated increases in leaf and direct material costs. During the second quarter, we were able to grow adjusted OCI by 7.4% excluding currency and acquisitions. Let me now briefly review our results on a regional basis, starting with the EU region. The net revenues and OCI were down slightly excluding currency. More than 3/4 of our 6.2% volume decline in the EU region is attributable to lower total markets, in particular in Spain, where the market continued to decline at a double-digit rate. Our year-to-date June cigarette share in Germany of 35.6% is 1.8 share points below the previous year's level but is showing a sequential improvement, and L&M remain the fastest-growing brand on the market. In the EU region, excluding Greece, our favorable pricing variance in the second quarter was 1.2x our unfavorable volume mix variance. During this period, the share of Marlboro grew notably in Italy, the Netherlands, Poland, Portugal and Slovakia, while L&M increased its share notably in Belgium, the Czech Republic, Germany, Greece, the Netherlands, Slovakia, Spain, Sweden and Switzerland. The EEMA region is expected to be a source of renewed strength for PMI going forward. It had a tremendous second quarter, with volume up 1.6%, net revenues increasing by 8.2%, excluding currency and acquisitions, and OCI, 16.9% higher on the same basis. As mentioned previously, our business is very strong in Russia, where our profitability in the second half of the year is expected to be enhanced by the recent price increase. We have strong business momentum in North Africa behind both Marlboro and L&M. In Egypt, there has been an important structural improvement in excise taxes, though tax and price levels are now significantly higher than originally expected, which will have an unfavorable near-term impact on market demand. The one market of concern is Turkey, where very large excise tax-driven price increases have resulted in a significant market contraction and consumer down trading. However, our market share now appears to have stabilized around 41%, the level prevalent as recently as 2008. And Lark is the fastest-growing brand in Turkey. In Asia, volume was 5.2% ahead of last year, excluding acquisition, and essentially stable after taking into account the inventory buildup in Japan. Net revenues were 11.5% higher, and OCI was up by 14.7%, excluding currency and acquisition. We achieved higher prices in unit margins across several markets, in particular, Australia, Indonesia and Pakistan. Our business momentum in Korea continued, with volume growing by 15.9% and market share up by a further three share points to 16.6%. In Indonesia, our volume decreased slightly, as price increases have slowed the overall market growth, while volume was lower in Pakistan, where the duty-paid market has declined significantly due to tax-driven price increases and the growth of illicit trade. Asia is the growth engine for Marlboro. The brand gained volume in many markets, including Indonesia, Japan, Korea and the Philippines, and was supported by our Marlboro Fresh initiative, such as Marlboro Black Menthol and Marlboro Ice Blast. Volume in Latin America and Canada increased by 0.9%, driven primarily by an increase in the size of the legitimate market in Canada, following more rigorous provincial legislation and most importantly, the improved enforcement. We achieved a slow market share performance with continued gains in Argentina and Mexico. Net revenues increased by 6.1% excluding currency, while adjusted OCI excluding currency was 0.5% higher, as we increased volume and higher prices were partly offset by higher leaf and manufacturing costs. Adjusted diluted EPS reached $1.00 in the second quarter, a significant increase of 20.5% over 2009 and up by a very robust 16.9% excluding currency. As previously announced in June, reported diluted EPS of $1.07 was boosted in the quarter by a favorable onetime tax item of $0.07 for the reversing of provision, largely due to the completion of U.S. tax audits. Our strong business results have fueled a further increase in our operating cash flow, which was 10.1% higher at $3.5 billion. Excluding currency, operating cash flow was up by 6.3%. Free cash flow increased at a slightly faster rate of 11.1%, and by 7.4% excluding currency. Our financial strength has enabled us to continue to reward our shareholders. In April, we completed our $13 billion share repurchase program on time, and in May, we started a new $12 billion three-year program. In the quarter, we spent $1 billion to purchase an additional 21.7 million shares. Our dividend of $2.32 per share on an annualized basis represented a yield of 4.6% on July 20. So let me summarize. We again achieved strong financial results this quarter, thanks to an improved volume performance, intact pricing power, driven by our superior brands and broad portfolio and productivity savings that have enabled us to absorb the foreseen increase in leaf cost. These results were achieved despite some additional challenges with regards to excise taxes and VAT. Our improved volume performance is based on our unmatched brand portfolio, though please keep in mind that our quarterly shipments in the second half are expected to be unfavorably impacted by this quarter's inventory buildup at our distributor in Japan. The new architecture and consumer-relevant product innovation are strengthening the Marlboro franchise. During the second quarter, Marlboro's market share was sequentially up or stable in 21 of our top 30 OCI markets. Since we established our 2010 EPS guidance in June, the euro has strengthened against the U.S. dollar. Consequently, at currently prevailing exchange rates, our positive business momentum should enable us to achieve a reported diluted EPS in 2010 of $3.75 to $3.85. Compared to 2009, this represents a strong growth rate of 16% to 19%, and approximately 14% to 17% excluding currency. Thank you. I will now be pleased to answer questions you may have.

[Operator Instructions] Our first question is coming from Judy Hong of Goldman Sachs. Judy Hong - Goldman Sachs Group Inc.: Couple of questions on EEMA. First, just in terms of Russia, obviously the improvement here is pretty encouraging, and the Premium segment moderating, I think, is also encouraging. Can you just talk about how you see that sort of playing out for the balance of the year? And do you actually think that the Premium segment can grow by year end in that market?

Yes, you're right. I mean, the situation in Russia is encouraging. We see clear signs of improvement. The down trading is not fully yet over, but it's substantially improving. And if we look at kind of the decline rate of the Premium segment in Q1, that was still down by 12.2%. I'm talking our volume share. In this quarter, it's minus 3.3%. The mid-segment, which was down in Q1 11% was now down by the 6% only, but still, but only in the second quarter. So that is a clear, clear sequential improvement. Let's see how it shakes out going forward. Overall, measured unemployment in Russia is down to 7.3%. It's the last May year-to-date number I have seen. That was 8.4% before. So it's substantial improvement. Also, in terms of total market size, I would expect at least a stable market for the full year, despite the recent price increases that we have implemented. Judy Hong - Goldman Sachs Group Inc.: And then another important market in that region, Ukraine, you've talked about the benefit in terms of the inventory movement in the quarter. Can you quantify how much that was? And then, if you think about the consumption trend post the excise tax-driven price increases, what do you think the impact at the consumption level would be?

There are, I would say, about on average, old price volumes in the market of duration of about 1.5 months. So there is still no effective forestalling regulation in place. That’s why we have that situation. I mean, the market reaction, you remember, I mean, it's still very affordable in the Ukraine overall, but we had a number of consecutive steep price increases. So total market, I mean, nominally in Q2 was only down 3%, yet we’re down [ph] (0:36:52) -- to date, it's down 11%. I think we will still look in the third quarter results at double-digit market decline. Overall, situations will improve also in the Ukraine at a slower pace than Russia, that's for sure, but it will improve. So GDP in the first quarter that I've seen, the last number was up 4.9%. Inflation is now down now to 8%, 8.5% year-on-year May. But the employment is still high at 9%. So it will come there was as well, but it will take longer. Judy Hong - Goldman Sachs Group Inc.: But in the second quarter, Hermann, the 4% increase in Ukraine, do you know how much that was boosted by the inventory movement?

I would say you would have seen still a double-digit decline without the inventory. Judy Hong - Goldman Sachs Group Inc.: And just finally on Japan, is it your expectation that all of the $3.4 billion inventory build in the quarter will come out in Q3? Or what's kind of the timing of when that gets flushed out in the marketplace?

Yes, I mean, essentially the 3.4 is the inventory buildup, because that's the number, the really hard number, what was the inventory at same period as last year, and what is it now? So therefore, I mean, essentially, it’s at least the $3.4 billion cigarettes numbers to take into account. You will see quite a bit of inventory de-loads because of additional consumer demand but also, of course, also of additional retailer purchases in the third quarter. And then in the fourth quarter will, of course, come also the overall market reaction of consumers, then, to those new prices and that's the harder impact to predict. Essentially, I must say, they’re not really new insights to when we discussed a month ago. The negative remains the high percentage retail price increase. And the positive remains that even in the JPY 400 price range, prices in Japan will still be very affordable, given the purchasing power of the Japanese consumer.

Your Next question comes from Christine Farkas of Bank of America Merrill Lynch. Christine Farkas - BofA Merrill Lynch: Just a quick follow-up on Japan. Again, in the third quarter, given there was some inventory buildup going into the third quarter, would you expect demand and even some more inventory to build or just basically demand pull up your shipments in the third quarter before we see declines in the fourth?

No. The shipment is our sales into the distributor, and I would say our inventories that we have built up now are sufficient to cover both the consumer demand and the retailer demand. Therefore, I mean, the consumer-increased demand in the third quarter will be reflected in the inventory reductions but will not anymore be reflected in the shipments on our side, i.e. therefore, in our financials. Christine Farkas - BofA Merrill Lynch: And then moving to Marlboro, I'm wondering if you could tell us how much the inventory pickup in Japan was Marlboro or helping Marlboro? And then when you look at Marlboro's underlying trends, can you speak to the architecture? There were certainly some comments about its having a stabilizing effect, but I'm sure if we pull out the inventory build, what underlying Marlboro might have looked like?

I mean, the inventory buildup in Japan, the brands contribute to that buildup essentially according to their market shares in the market. Then more broadly, your Marlboro question I thought was Japan, but your question is broader. I will go to other markets there as well. I mean, in Japan, Marlboro is doing well. It is up 0.2% a share to 10.8%. It has about double the young-adults smokers share than its actual market share. But it's not the only place where we see nice improvements in share increases of Marlboro. Give you a couple of examples: Korea would be up 1.2% share points to 6.8%; Poland would be up 0.7% to 10.2%; the Netherlands is up 0.8% to 34.7%; Italy is up 0.3% to 23%; Argentina, to go into Latin America as well, is up at 0.3% to 23.4%. So there is really good trends in many different places around the world. And we, of course, still also have a couple of places in the world where we have to continue on our work and with the good work that has been done there. The ones where Marlboro is really down is first of all those markets which were really hit by the economy, like Turkey, Greece and Spain. Turkey is down 2.5 share points to 8.1; Greece down 3.7 to 19.3; and Spain is down 0.6 to 14.8. So that is really the economy that drives the down trading in those markets. And then there is Germany, where we now are down to a share of 21.6, which is, however, sequentially stable over the last couple of months. That is not the economy. That is simply an overall price-sensitive market overall, where it’s really a bit more difficult to act. On the other hand, if you are being very successful in that market with L&M, which is our answer to the market situation there.

Your next question comes from David Adelman of Morgan Stanley. David Adelman - Morgan Stanley: Let me ask you some follow-up questions in Japan, if I could. First, can you review with us on the major brand how much pricing you've requested?

Yes, I can. The request for Lark and Philip Morris is up JPY 110 to JPY 410 plus tax. Virginia Slims, Marlboro, up JPY 120 to JPY 440. And the king-size variants of Parliament also up JPY 120 to JPY 450. The 100 versions actually retail even JPY 20 higher, we have requested JPY 470. David Adelman - Morgan Stanley: And then, am I right, Hermann, that the favorable operating income impact of the trade buildup in the second quarter might have been about $75 million? Is that in the right ballpark?

$75 million for the trade inventory buildup of Japan only? David Adelman - Morgan Stanley: Yes.

I think there you are being a bit too modest. David Adelman - Morgan Stanley: And then the release, Hermann, mentioned that the Japanese market volumes were down 7.1%? Is that a consumption number during the second quarter?

What it is, it is the market number we see there, I mean, there are a couple of onetime effects in there, the results already, a lot of talking going on about the price increases, although they have not even materialized in the market yet. I'd say for that quarter, it's probably the number is rather 5% than 7%. David Adelman - Morgan Stanley: And then lastly in Japan, Hermann, can you just explain the comment you made in your prepared remarks that in the fourth quarter after the price increase there will be a favorable variance in your operating income from the revaluation of inventory and the trade. Exactly, what’s it going to occur? And how does it affect your P&L?

There will be a certain inventory level, then, on September 30 or October 1, okay, at the distributor. The additional value arising from the price increase of those inventories accrues to us. And that will be then reflected in adjustments of the selling prices in October. So therefore, this is an effect in our P&L in the fourth quarter. The inventories held by the retailers, that added value is actually to the benefit of the retailers.

Your next question comes from Chris Growe of Stifel, Nicolaus. Christopher Growe - Stifel, Nicolaus & Co., Inc.: I just to want to follow up, if I could, on David's question. It would be, in terms of the benefit to you in the fourth quarter on the inventory revaluation in Japan, would be only based on the inventory that's still left at the distributor where prices have gone higher. Is that the right way to say it?

That's correct. Christopher Growe - Stifel, Nicolaus & Co., Inc.: We can't predict necessarily where those inventories may stand just at this time, right?

No, because we don't know yet what really what the additional consumer demand will be and how much additional volume will go into retail. But there will be substantial number of volumes to lift. Christopher Growe - Stifel, Nicolaus & Co., Inc.: And then I just had two questions: The first would be, in this quarter, we're seeing a bit of an improvement overall in premium and especially with Marlboro doing well. Can you say even in rough terms if mix was positive in the quarter? I presume it was. I want to get -- just get a sense of that?

Well, I mean, we have -- as we've said, we have a number of places around the world where Marlboro is just doing well. I mean, this is principally in Asia, which as I said in my prepared remarks, is kind of the growth engine for Marlboro. So that's where you probably get the most. It’s not in Asia, you will also see some in the markets, which would be Latin America, also in Latin America, then in Mexico. So it goes through a broad range of markets, I would say. It kind of goes along with my earlier remarks on where Marlboro is doing really well and where, due to economy or price sensitivity, Marlboro, there is still some work needed on the brand. Christopher Growe - Stifel, Nicolaus & Co., Inc.: And my other question just is related to -- you called out some higher costs in Indonesia. It was one of the markets you mentioned. Could you just give a little more color on that? And I think we saw it last quarter, too, if I recall.

Yes, it is. It is in manufacturing cost. It is in leaf, in Indonesian leaf. It is also, I think, in cloves, so these are really the cost increases. It’s in the manufacturing area. Christopher Growe - Stifel, Nicolaus & Co., Inc.: Higher leaf costs?

Yes.

Your next question comes from Adam Spielman of Citigroup. Adam Spielman - Citigroup Inc: You may have answered this already, but I had to -- as I say, I’ve missed a lot of the call. But is there any way of quantifying what the pricing variance in Greece was? I mean, I suppose I’m -- another way of doing that is, what the EU might have looked like if it hadn't been for the problems in Greece.

I would say, roughly, the situation in Greece has been a 3% drag on the OCI growth rate of the EU region in the quarter. Adam Spielman - Citigroup Inc: Are you able to say what it would be as a drag on the net revenues as well?

I think that was already very precise, no?

Your next question comes from Jon Fell of Deutsche Bank. Jonathan Fell - Deutsche Bank AG: First of all, on Canada, clearly a very strong bounce back in the legal market there, and you had a good first quarter as well. Do you see this improvement in the situation with regards to the [audio gap] (0:50:22) -- is this sustainable? Or are there particular one-off sort of factors which have pushed the market up more temporarily? And secondly, just with regards to Philippines, the incremental benefits that you're getting from acquisitions there, the 17.2 billion of volume in the second quarter. Are we done now with the impacts of the Philippines deal in terms of one-offs for the rest of the year? Or will we be feeling impacts as well in the third and fourth quarters?

So Canada first. The market, actually, the legal market in the second quarter, up 20%. There was an additional effect in there, which were price increases actually, due to the harmonization of the provincial and federal sales tax in Ontario and Québec. So if you take an estimate for that effect out, then the increase is still about 15%. That compares to 10.5% in the first quarter. I think, together, if enforcement that I, of course, dearly hope will continue to increase, increases should be possible further. It will not be forever 15%, though. Then on the Philippines, well, on the volume, this is, of course -- we will separate that out until the year has left and that then this becomes part of the organic and underlying business. So it will continue until then. For the Philippines itself, maybe let me add a word there. It’s going really well. The market is growing, expected to grow 8% to 10% for the full year. Marlboro is going strong in the market, benefiting from improved distribution, so -- it has a share of market of 21% there. The integration is going really well. Cost-saving potential that we saw before the acquisition, more and more is confirmed. We see that, for example, in terms of tobacco usage. So it's going well. It's going nicely. I'm very happy with this business combination in the Philippines.

[Operator Instructions] Your next question comes from Thilo Wrede from Credit Suisse. Thilo Wrede - Crédit Suisse AG: Hermann, I think at the beginning of the year, you talked about that you had already taken 2/3 of the prices that you saw necessary to achieve your guidance. Are you done with all the necessary price increases by now? Or is there more coming in the second half of the year?

Well, pricing is always a little bit skewed or very much skewed towards the beginning of the year because this is when governments makes their budgets. And this is then when our pricing decisions follow those governmental budget decisions. So I would only -- I always have to limit myself to the actuals here. You have seen that we just announced a price increase in the Russian market or implementing a price increase in the Russian market. Let me put it this way, we are fully on track with our pricing plans to achieve the results that are reflected in our EPS guidance. Thilo Wrede - Crédit Suisse AG: And then are you still planning to buy back $4 billion of your own shares this year? I think you're running well ahead of that pace by now.

Yes, that we have a higher amount so far that is driven by the old share repurchase program that we finished in April. So that was a higher going rate in there. The decision is to be in the range of $4 billion for the full year. That's still the plan. Thilo Wrede - Crédit Suisse AG: And any updates on the attempts to buy pro-tobacco in Colombia? Are there any new developments in that story?

It's still a pending process, an ongoing process. We don't have a decision yet. I would say the outcome is open.

Our final question comes from Thomas Russo of Gardner. Thomas Russo - Gardner Russo: In the Western European markets that are sagging from Marlboro, and generally show challenging through the economic conditions. To what extent are you beginning to see evidence of increased illicit or contraband coming into those markets?

Well, in the German market, there is a little bit of an increase, maybe a percentage point or something in the broader sales. So that is 20%, 21%, right now, of consumption in the German market. From market increases in the other markets, no, I don't see.

That was our final question. I'll now turn it back to management for closing remarks.

Let me close, just couple of remarks then. I think we have had another strong quarter. Our underlying business is there, pricing power continues. We are competitive in the marketplace. And thanks to our global footprint, we are able to compensate excise tax hiccups, which we are managing through. And based on the currency at prevailing rates, that situation looks a bit better, hence the increase in our guidance. Thank you very much. I'll hand it back to Nick.

Thank you, Hermann, and thank you, all, for joining us. That concludes our call for today. If you have any follow-up questions, please contact the Investor Relations team in Lausanne, Switzerland. The telephone number is posted on our website and also on our press release. Thank you, again, and have a great day.

Thank you for participating in today's conference call. You may now disconnect.