Altria Group, Inc. · NYSE:MO
Altria — Q4 2020 Earnings Presentation
30 slides from Altria's earnings presentation, Jan 28, 2021
Slide 1: Altria's Fourth-Quarter 2020 Earnings Conference Call
Altria’s Fourth-Quarter 2020 Earnings Conference Call January 28, 2021 1 | ALCS | Q4 2020 | 1.28.21 | For Investor Purposes ONLY
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: Steady Progress Against Our Goals
Steady Progress Against Our Goals All-third party trademarks remain the property of their respective owners. 3 | ALCS | Q4 2020 | 1.28.21 | For Investor Purposes ONLY
Slide 4: Tobacco Space Estimated Volumes
Tobacco Space Estimated Volumes Equivalized Volume in Billions Combustible Oral Tobacco E-Vapor (1.0)% CAGR 16.8 16.5 16.2 16.1 15.9 15.9 2015 2016 2017 2018 2019 2020 Note: Volume for Heated Tobacco products rounded to 0.0 billion for 2019 and 2020 Sources: CMI Estimates; IRI MOC; Capstone; ComScor
Slide 5: Adjusted Diluted EPS & Dividends Per Share
Adjusted Diluted EPS* & Dividends Per Share Adjusted Diluted EPS Dividends Per Share +3.6% +2.4% $4.21 $4.36 $3.36 $3.44 2019 2020 2019 2020 *For reconciliations of non-GAAP to GAAP measures visit altria.com. 5 | ALCS | Q4 2020 | 1.28.21 | For Investor Purposes ONLY
Slide 6: Smokeable Products Segment Results
Smokeable Products Segment Results Adjusted OCI* ($ in billions) +5.5% CAGR $10.1 $9.2 $8.5 $8.4 $7.7 $8.0 2015 2016 2017 2018** 2019 2020 YoY Changes Industry Adj. (0.5)% (2.5)% (4.0)% (4.5)% (5.5)% 0.0% Cig. Volumes Marlboro +0.2pp (0.1)pp (0.5)pp (0.2)pp (0.1)pp (0.3)pp Retail Share *For reconcil
Slide 7: Our 10-Year Vision: Responsibly Lead The Transition of Adult Smokers to a Noncombustible Future
Our 10-Year Vision: Responsibly Lead The Transition of Adult Smokers to a Noncombustible Future To achieve our vision, we will... ▪ Lead the industry in operating responsibly and preventing underage use of adult products ▪ Develop and expand our portfolio of FDA–authorized, noncombustible products a
Slide 8: Our Unmatched Oral Tobacco Portfolio
Our Unmatched Oral Tobacco Portfolio 8 | ALCS | Q4 2020 | 1.28.21 | For Investor Purposes ONLY
Slide 9: Significant 2020 Progress for Helix
Significant 2020 Progress for Helix ▪ Filed PMTAs for the on! portfolio ▪ Established on! manufacturing in Richmond and reached annualized capacity of 50 million cans; Helix expects unconstrained manufacturing capacity for the U.S. market by mid-year 2021 ▪ Steadily increased the retail distribution
Slide 10: Building on! Momentum
Building on! Momentum Retail Store Count Cumulative Share of Oral Tobacco Category (in thousands) (in stores with distribution) 90 3 78 2.4 2.1 56 1.7 1.5 40 28 15 9 - - Q3 '19* Q4 '19 Q1' 20 Q2 '20 Q3 '20 Q4 '20 Q1' 20 Q2 '20 Q3 '20 Q4 '20 YTD YTD YTD YTD *Transaction closed in August 2019 Source:
Slide 11: Satisfaction Anytime, Anywhere
Satisfaction Anytime, Anywhere 11 | ALCS | Q4 2020 | 1.28.21 | For Investor Purposes ONLY
Slide 12: E-Vapor Category Volume
E-Vapor Category Volume Estimated Equivalized Volume (in billions of units) Quarterly Estimates Category ∆ vs. YAGO 0.7 Q4: 0% FY: (10)% 0.50 0.51 0.46 0.47 0.44 0.47 0.44 0.40 0.0 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2 '20 Q3 '20 Q4 '20 Source: ALCS CMI estimates Note: Share based on volume equivali
Slide 13: 2020 IQOS & Marlboro HeatSticks Expansion Efforts
2020 IQOS & Marlboro HeatSticks Expansion Efforts Product Expansion ▪ Launched in Charlotte with a more disruptive retail fixture ▪ Expanded the retail distribution of HeatSticks into ~1,000 total stores ▪ Introduced devices into select Charlotte convenience stores Adult Smoker Engagement ▪ Develope
Slide 14: IQOS 3 Authorization
IQOS 3 Authorization All-third party trademarks remain the property of their respective owners. 14 | ALCS | Q4 2020 | 1.28.21 | For Investor Purposes ONLY
Slide 15: Updated HeatSticks Packaging
Updated HeatSticks Packaging All-third party trademarks remain the property of their respective owners. 15 | ALCS | Q4 2020 | 1.28.21 | For Investor Purposes ONLY
Slide 16: 2021 Financial Outlook
2021 Financial Outlook ▪ Our 2021 plans include accelerating investments in support of our 10-year Vision ▪ We’re monitoring the dynamic external environment, including: ▪ unemployment rates; ▪ fiscal stimulus; ▪ adult tobacco consumer dynamics, including stay-at-home practices, disposable income, p
Slide 17: 2021 Full-Year Adjusted Diluted EPS Guidance
2021 Full-Year Adjusted Diluted EPS* Guidance ▪ Taking these factors into consideration, we expect to deliver full-year 2021 adjusted diluted EPS* of $4.49 to $4.62. This range represents an adjusted diluted EPS growth rate of 3% to 6% from a 2020 base of $4.36. ▪ Our 2021 EPS guidance incorporates
Slide 18: Q4 2020 Adult Tobacco Consumer (ATC) Influences
Q4 2020 Adult Tobacco Consumer (ATC) Influences ▪ Economic conditions remained challenging for ATCs in the fourth quarter as unemployment rates remained high and the enhanced benefits from the original pandemic assistance package were exhausted. ▪ However, we believe ATCs continued their stay-at-hom
Slide 19: Smokeable Products Segment Results
Smokeable Products Segment Results Adjusted OCI* and OCI Margins* Adjusted OCI ($ in millions) Adjusted OCI Margins +10.2% +1.9pp $10,111 $9,173 56.4% 54.5% 2019 2020 2019 2020 *For reconciliations of non-GAAP to GAAP measures visit altria.com. 19 | ALCS | Q4 2020 | 1.28.21 | For Investor Purposes O
Slide 20: Adjusted Cigarette Volume Decline Rate Estimates
Adjusted Cigarette Volume Decline Rate Estimates Smokeable Products Segment Total Industry Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2020 Q2 2020 Q3 2020 Q4 2020 1.0% 0.5 % 0% (1.0)% (1.0)% (2.0)% (2.0)% (3.5)% FY 2020 = (2.0)% FY 2020 = 0.0% Source: ALCS CMI estimates – rounded to nearest 0.5% Note: Estim
Slide 21: 2021 Cigarette Industry Dynamics
2021 Cigarette Industry Dynamics ▪ We expect 2021 cigarette industry volume trends to be most influenced by (i) adult smoker stay-at-home practices, (ii) unemployment rates, (iii) fiscal stimulus, (iv) cross-category movement, (v) the timing and breadth of COVID-19 vaccine deployment and (vi) adult
Slide 22: Smokeable Products Segment: Marlboro Retail Share
Smokeable Products Segment Marlboro Retail Share Quarterly Full Year 45 43.3 43.3 43.3 42.8 42.8 43.0 ∆ vs. YAGO (0.5) (0.6) - +0.2 35 Q1 '20 Q2 '20 Q3 '20 Q4 '20 2019 2020 Source: IRI/MSAi InfoScan Cigarette 2020 – Blended, as of 01/03/21 22 | ALCS | Q4 2020 | 1.28.21 | For Investor Purposes ONLY
Slide 23: Discount Segment Retail Share
Discount Segment Retail Share Quarterly Full Year 30 24.8 24.6 24.3 24.5 24.3 24.5 23.7 23.6 23.8 24.2 15.3 15.1 14.9 14.8 15.0 15.5 17.9 16.6 16.0 17.3 9.5 9.5 9.4 9.7 8.7 9.5 7.0 7.8 6.4 6.4 0 Q1 '20 Q2 '20 Q3 '20 Q4 '20 2015 2016 2017 2018 2019 2020 Source: IRI/MSAi InfoScan Cigarette 2020 – Blen
Slide 24: John Middleton Cigars
John Middleton Cigars 24 | ALCS | Q4 2020 | 1.28.21 | For Investor Purposes ONLY
Slide 25: Oral Tobacco Products Segment Results
Oral Tobacco Products Segment Results Adjusted OCI* and OCI Margins* Adjusted OCI ($ in millions) Adjusted OCI Margins +7.3% 0.0pp $1,724 $1,606 71.7% 71.7% 2019 2020 2019 2020 *For reconciliations of non-GAAP to GAAP measures visit altria.com. 25 | ALCS | Q4 2020 | 1.28.21 | For Investor Purposes O
Slide 26: Oral Tobacco Products Segment: Full-Year 2020 Retail Share
Oral Tobacco Products Segment Full-Year 2020 Retail Share By Company (%) By Brand (%) 49.8 31.9 13.8 Swedish Match BAT Oral Tobacco Skoal Grizzly Copenhagen Products Segment Source: IRI/MSAi InfoScan Cigarette 2020 – Blended, as of 01/03/21 26 | ALCS | Q4 2020 | 1.28.21 | For Investor Purposes ONLY
Slide 27: Our Alcohol Assets
Our Alcohol Assets All-third party trademarks remain the property of their respective owners. 27 | ALCS | Q4 2020 | 1.28.21 | For Investor Purposes ONLY
Slide 28: Philip Morris Capital Corporation
Philip Morris Capital Corporation Net Finance Assets Balance ▪ More than half of the full-year 2020 ($ in millions) adjusted losses in the all other category related to reductions in the estimated residual value of certain $4,803 assets at PMCC. ▪ We expect to continue reducing the net finance asset
Slide 29: Capital Allocation
Capital Allocation ▪ Our balance sheet remains strong and our tobacco businesses are highly cash generative. ▪ Dividends remain our primary vehicle for returning cash to shareholders and our long-term objective is a dividend target payout ratio of approximately 80% of adjusted diluted EPS. ▪ Altria’
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