Altria Group, Inc. · NYSE:MO
Altria — Q1 2022 Earnings Presentation
31 slides from Altria's earnings presentation, Apr 28, 2022
Slide 1: Altria's First-Quarter 2022 Earnings Conference Call
Altria’s First-Quarter 2022 Earnings Conference Call April 28, 2022 1 | ALCS | Q1 2022 | 04.28.22 | For Investor Purposes ONLY | FINAL
Slide 2: Safe Harbor Statement
Safe Harbor Statement Statements, including earnings guidance, in this presentation that are not reported financial results or other historical information are “forward-looking statements” within the meaning of Private Securities Litigation Reform Act of 1995. Such forward-looking statements are bas
Slide 3: Responsibly lead the transition of adult smokers to a smoke free future
Responsibly lead | i the transition of adult SMOkers . to. a smoke: free future. Moving beyond smoking”
Slide 4: Cigarette Trips and Volume Sales Trends
Cigarette Trips and Volume Sales Trends¹ 2021, 2022 Total Trips Volume Per Trip Total Volume (in millions) (in packs) (in millions) 50 2 75 Billy Gifford Chief Executive Officer Millions Millions Altria Group, Inc. - 1 Jan-21 25 Jun-21 Jul-21 Feb-21 Mar-21 Nov-21 Dec-21 Aug-21 Sep-21 May-21 Oct-21 A
Slide 5: Macroeconomic Headwinds
Macroeconomic Headwinds Consumer Price Index Weekly Retail Gasoline and Diesel Prices 10% $5.00 1% $2.00 Jan-21 Jun-21 Jul-21 Jan-22 Feb-21 Mar-21 Feb-22 Mar-22 Nov-21 Dec-21 Aug-21 Sep-21 May-21 Oct-21 Apr-21 Jan-21 Jun-21 Jul-21 Jan-22 Mar-21 Mar-22 Feb-21 Feb-22 Aug-21 Sep-21 Nov-21 Dec-21 Oct-21
Slide 6: Macroeconomic Tailwinds
Macroeconomic Tailwinds 12% Wage Growth by Occupation (Q1 2022 vs. Q1 2021) 11.0% 9.8% 8.0% Average Inflation 8.1% Billy Gifford 6.3% 5.9% Chief Executive Officer 5.3% 4.9% Average Wage Growth 4.9% Altria Group, Inc. 4.0% 2.5% 1.6% 0% Maintenance Sales Construction Financial Administrative Service P
Slide 7: Q1 2022: Adjusted Diluted Earnings Per Share (EPS)
Q1 2022: Adjusted Diluted Earnings Per Share (EPS)* Adjusted Diluted EPS +4.7% $1.12 $1.07 Billy Gifford Chief Executive Officer Altria Group, Inc. 2021 2022 *For reconciliations of non-GAAP to GAAP measures visit altria.com. 7 | ALCS | Q1 2022 | 04.28.22 | For Investor Purposes ONLY | FINAL
Slide 8: Smokeable Products Segment
Smokeable Products Segment Adjusted Operating Companies Income* (OCI) Adjusted OCI Marlboro Retail Share ($ in millions) +5.7% - $2,511 $2,375 42.6% 42.6% Billy Gifford Chief Executive Officer Altria Group, Inc. ∆ vs. (0.4) (0.4) YAGO Q1 '21 Q1 '22 Q4 '21 Q1 '22 *For reconciliations of non-GAAP to G
Slide 9: Continued on! Share Growth and Shipment Volume
Continued on! Share Growth and Shipment Volume on! Shipment Volume on! Share of Oral Tobacco Category (cans in millions) (total U.S.) 4.1 3.8 +98.9% 18.3 3.0 Billy Gifford Chief Executive Officer Altria Group, Inc. 2.0 9.2 1.6 Q1 '21 Q1 '22 Q1 '21 Q2 '21 Q3 '21 Q4 21 Q1 '22 Source: IRI InfoScan Oral
Slide 10: Oral Nicotine Pouch (ONP) Category Growth
Oral Nicotine Pouch (ONP) Category Growth Share of total U.S. oral tobacco category ONP Share ONP Share Growth by Brand (Q1 2022 vs. Q1 2021) +6.1pp 19.3 62% 13.2 41% ∆ vs. 3.8 YAGO 2.5 7% (10%) 0.4 Q1 '21 Q1 '22 (0.6) Zyn on! Velo Other Source: IRI InfoScan Oral Tobacco MOC, WE 04/03/22 10 | ALCS |
Slide 11: Oral Tobacco Regulatory Update
Oral Tobacco Regulatory Update • Our premarket tobacco product applications (PMTA) for the entire on! portfolio remain pending with the U.S. Food and Drug Administration (FDA), and we believe the FDA should determine that the marketing of these products is appropriate for the protection of public he
Slide 12: E-Vapor Category Volume
E-Vapor Category Volume Estimated Equivalized Volume (in billions of units) Q1 2022 Category ∆ Quarterly Estimates 4% Q/Q Increase 10% Y/Y Increase 0.55 0.51 0.52 0.52 0.49 0.50 0.50 0.45 0.46 0.46 0.44 0.44 Billy Gifford 0.40 Chief Executive Officer Altria Group, Inc. Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1
Slide 13: IQOS
IQOS All third-party trademarks remain the property of their respective owners. 13 | ALCS | Q1 2022 | 04.28.22 | For Investor Purposes ONLY | FINAL
Slide 14: Regulatory Update
Regulatory Update Synthetic Nicotine • President Biden signed a bill last month to bring synthetic nicotine products under FDA regulation. • The bill allows manufacturers of synthetic nicotine products currently on the market to keep those products on the market for 120 days after the bill’s enactme
Slide 15: Regulatory Update (continued)
Regulatory Update (continued) FDA Rulemaking Process Initiating events to Optional: Advance Notice of Determination whether consider rulemaking Proposed Rulemaking a rule is needed Optional: Tobacco Products Preparation of Billy Gifford Scientific Advisory Committee Office of Management & Budget pro
Slide 16: Prevalence of menthol cigarette smoking among youth
National Survey on Drug Use and Health 2002-2020 Prevalence of menthol cigarette smoking among youth ages 12-17 by race/ethnicity 8 Overall NH-White NH-Black Hispanic Other 5.5 Billy Gifford 4.7 Percentage (%) Chief Executive4.3 Officer Altria Group,3.5 Inc. 2.9 1.2 0.8 0.5 0.4 0 0.4 2002 2003 2004
Slide 17: 17 | ALCS | Q1 2022 | 04.28.22 | For Investor Purposes ONLY |
17 | ALCS | Q1 2022 | 04.28.22 | For Investor Purposes ONLY | DRAFT
Slide 18: 18 | ALCS | Q1 2022 | 04.28.22 | For Investor Purposes ONLY |
18 | ALCS | Q1 2022 | 04.28.22 | For Investor Purposes ONLY | FINAL
Slide 19: Inflationary Environment Update
Inflationary Environment Update • We continue to monitor the potential impacts to our operations and supply chain, and we are actively working to mitigate risk. • Thanks to the hard work of our teams, we have not experienced material adverse impact from these events. • While our company will continu
Slide 20: Smokeable Products Segment
Smokeable Products Segment Adjusted OCI* and Adjusted OCI Margins* Adjusted OCI Adjusted OCI Margins ($ in millions) +5.7% +2.0pp $2,511 59.5% $2,375 57.5% Billy Gifford Chief Executive Officer Altria Group, Inc. Q1 '21 Q1 '22 Q1 '21 Q1 '22 *For reconciliations of non-GAAP to GAAP measures visit alt
Slide 21: Adjusted Cigarette Decline Rates
Adjusted Cigarette Decline Rates Smokeable Segment Total Industry Q1 2021 Q1 2022 Q1 2021 Q1 2022 (2.0)% (3.5)% (6.5)% (8.0)% (5.5%) (4.5%) 2-year 2-year Average Average Source: AVI SCMI estimates – rounded to nearest 0.5% Note: Estimates are subject to revision due to wholesaler resubmission of inv
Slide 22: Smokeable Products Segment
Smokeable Products Segment Marlboro Retail Share 42.5 42.6 43.1 43.0 43.0 43.1 43.0 42.6 42.6 Q1 '20 Q2 '20 Q3 '20 Q4 '20 Q1 '21 Q2 '21 Q3 '21 Q4' 21 Q1 '22 Marlboro Share of Premium Segment 57.0 56.8 57.3 57.4 57.6 57.6 57.8 57.6 57.8 Source: IRI/MSAi InfoScan – Blended, WE 04/03/22 22 | ALCS | Q1
Slide 23: Discount Retail Share
Discount Retail Share Total Discount Segment (%) Deep Discount Branded Discount 30.0 26.1 26.4 25.4 25.1 25.2 25.4 25.1 25.5 24.8 Billy Gifford Chief Executive Officer 15.0 14.8 14.9 Altria Group, Inc. 15.3 15.1 14.9 14.8 14.9 14.7 10.4 10.5 10.4 10.7 11.2 11.4 10.1 10.0 9.9 0.0 Q1 '20 Q2 '20 Q3 '20
Slide 24: John Middleton Cigars
John Middleton Cigars Reported Shipment Volume (in millions) (9.6%) 480 434 Billy Gifford Chief Executive Officer Altria Group, Inc. Q1 '21 Q1 '22 24 | ALCS | Q1 2022 | 04.28.22 | For Investor Purposes ONLY | FINAL
Slide 25: Q1 2022: Oral Tobacco Products Segment
Q1 2022: Oral Tobacco Products Segment Adjusted OCI* and Adjusted OCI Margins* Adjusted OCI Adjusted OCI Margins ($ in millions) (5.1%) (2.4pp) 72.1% $429 69.7% $407 Billy Gifford Chief Executive Officer Altria Group, Inc. Q1 '21 Q1 '22 Q1 '21 Q1 '22 *For reconciliations of non-GAAP to GAAP measures
Slide 26: Oral Tobacco Industry Volume Growth Estimates
Oral Tobacco Industry Volume Growth Estimates Six Months Ended 7.0% 6.5% 6.0% Billy Gifford 5.0%* 5.0% 5.0% Chief Executive Officer Altria Group, Inc. 3.0% 2.0% 1.5% Q1 '20 Q2 '20 Q3 '20 Q4 '20 Q1 '21 Q2 '21 Q3 '21 Q4 '21 Q1 '22 Source: AVI SCMI Estimates - rounded to the nearest 0.5% Oral Tobacco i
Slide 27: Oral Tobacco Products Segment Retail Share
Oral Tobacco Products Segment Retail Share MST + Snus on! 48.0 47.7 47.7 47.6 46.9 1.6 2.0 3.0 Billy Gifford 3.8 4.1 Chief Executive Officer Altria Group, Inc. 46.4 45.7 44.7 43.8 42.8 Q1 '21 Q2 '21 Q3 '21 Q4 '21 Q1 '22 Source: IRI/MSAi InfoScan Oral Tobacco 2021 – MOC, WE 04/03/22 27 | ALCS | Q1 20
Slide 28: Adjusted Equity Earnings From ABI Investment
Adjusted Equity Earnings* From ABI Investment $ in millions (25.8%) $190 Billy Gifford Chief Executive Officer $141 Altria Group, Inc. Q1 '21 Q1 '22 *For reconciliations of non-GAAP to GAAP measures visit altria.com. All third-party trademarks remain the property of their respective owners. 28 | ALC
Slide 29: Capital Allocation and Guidance
Capital Allocation and Guidance Cash Returned to Shareholders 2022 Guidance • We reaffirm our guidance to deliver 2022 full-year $2.2 B adjusted diluted EPS* in a range of $4.79 to $4.93. Guidanc Share Repurchases $0.6 B This erange represents an adjusted diluted EPS Share Repurchases growth rate of
Slide 30: Committed to Reducing our Environmental Impact
Committed to Reducing our Environmental Impact Billy Gifford Chief Executive Officer Altria Group, Inc. 30 | ALCS | Q1 2022 | 04.28.22 | For Investor Purposes ONLY | FINAL
Slide 31: Responsibly lead the transition of adult smokers to a smoke free future
Responsibly lead | i the transition of adult SMOkers . to. a smoke: free future. Moving beyond smoking”