Altria Group, Inc. · NYSE:MO
Altria — Q2 2021 Earnings Presentation
30 slides from Altria's earnings presentation, Jul 29, 2021
Slide 1: Altria's Second-Quarter 2021 Earnings Conference Call
Altria’s Second-Quarter 2021 Earnings Conference Call July 29, 2021 1 | ALCS | Q2 2021 | 7.29.21 | 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: Moving Beyond Smoking
Responsibly lead the transition Moving Beyond Smoking ™ of adult smokers to a smoke-free* future *Previous Vision language: Responsibly lead the transition of adult smokers to a non-combustible future 3 | ALCS | Q2 2021 | 7.29.21 | For Investor Purposes ONLY
Slide 4: Q2 2021: Adjusted Diluted Earnings Per Share
Q2 2021: Adjusted Diluted Earnings Per Share* Adjusted Diluted EPS +12.8% $1.23 $1.09 2020 2021 *For reconciliations of non-GAAP to GAAP measures visit altria.com. 4 | ALCS | Q2 2021 | 7.29.21 | For Investor Purposes ONLY
Slide 5: Smokeable Products Segment
Smokeable Products Segment Adjusted Operating Companies Income* (OCI) Adjusted OCI Adjusted OCI ($ in millions) ($ in millions) +11.0% +5.3% $5,159 $4,900 $2,784 $2,508 Q2 2020 Q2 2021 1H 2020 1H 2021 *For reconciliations of non-GAAP to GAAP measures visit altria.com. 5 | ALCS | Q2 2021 | 7.29.21 |
Slide 6: Oral Tobacco Products Segment
Oral Tobacco Products Segment Adjusted OCI* Adjusted OCI Adjusted OCI ($ in millions) ($ in millions) +3.5% +3.3% $901 $872 $456 $472 Q2 2020 Q2 2021 1H 2020 1H 2021 *For reconciliations of non-GAAP to GAAP measures visit altria.com. 6 | ALCS | Q2 2021 | 7.29.21 | For Investor Purposes ONLY
Slide 7: Unconstrained on! Manufacturing Capacity
Unconstrained on! Manufacturing Capacity Helix achieved unconstrained manufacturing capacity for the current U.S. market As the category grows, Helix plans to further increase on! capacity ahead of expected demand 7 | ALCS | Q2 2021 | 7.29.21 | For Investor Purposes ONLY
Slide 8: on! Performance
on! Performance Retail Store Count Share of Oral Tobacco Category (in thousands) (total U.S.) 105 93 2.0 78 1.7 60 1.1 40 26 15 Q4 '19 Q1' 20 Q2 '20 Q3 '20 Q4 '20 Q1' 21 Q2 '21 Q4' 20 Q1 '21 Q2 '21 Source: STARS week ending 07/04/2021 Source: IRI InfoScan Oral Tobacco MOC, week ending 07/04/2021 8 |
Slide 9: Building on! Brand Awareness and Trial
Building on! Brand Awareness and Trial Adult Smoker Adult Dipper 9 | ALCS | Q2 2021 | 7.29.21 | For Investor Purposes ONLY
Slide 10: IQOS Expansion Performance
IQOS Expansion Performance GA, VA, NC & SC IQOS Device Sales GA, VA, NC, SC + All Metro Areas Flexible Retail + Boutiques Convenience 45% 55% HeatSticks only Devices & HeatSticks Q4 2020 Q1 2021 Q2 2021 All-third party trademarks remain the property of their respective owners. Source: STARS data thr
Slide 11: IQOS Expansion Performance
IQOS Expansion Performance Northern Virginia Market IQOS Device Penetration % ATL CLT NoVA IQOS Boutique, Northern Virginia 0 2 4 6 8 10 12 14 16 18 20 22 24 26 Weeks All-third party trademarks remain the property of their respective owners. Source: POS Scan data through WE 7/3/21. CEA data through
Slide 12: Strengthening Capabilities in Support of Our Vision
Strengthening Capabilities in Support of Our Vision 12 | ALCS | Q2 2021 | 7.29.21 | For Investor Purposes ONLY
Slide 13: Altria's Scientific Engagement
Altria’s Scientific Engagement Dr. Maria Gogova, Altria Chief Scientific Officer 13 | ALCS | Q2 2021 | 7.29.21 | For Investor Purposes ONLY
Slide 14: 2021 Adjusted Diluted EPS Guidance
2021 Adjusted Diluted EPS* Guidance We’ve raised the lower end of our full-year 2021 adjusted diluted EPS guidance to be in the range of $4.56 to $4.62. This range represents a growth rate of 4.5% to 6% from a $4.36 base in 2020. This updated guidance reflects: • continued confidence in our tobacco
Slide 15: Cigarette Trips and Volume Sales Trends
Cigarette Trips and Volume Sales Trends1 2020, 2021 Total Trips Volume Per Trip (in millions) (in packs) 50 3 Millions - - 1/9 2/9 3/9 4/9 5/9 6/9 7/9 8/9 9/9 10/9 11/9 12/9 1/9 2/9 3/9 4/9 5/9 6/9 7/9 8/9 9/9 10/9 11/9 12/9 Source: Databricks POS Scan week ending 07.03.2021 as of 07.20.2021 1 Store
Slide 16: Smokeable Products Segment: Adjusted OCI Margins
Smokeable Products Segment Adjusted OCI Margins* Adjusted OCI Margins Adjusted OCI Margins +0.6pp +1.5pp 57.8% 58.4% 58.0% 56.5% Q2 2020 Q2 2021 1H 2020 1H 2021 *For reconciliations of non-GAAP to GAAP measures visit altria.com. 16 | ALCS | Q2 2021 | 7.29.21 | For Investor Purposes ONLY
Slide 17: Adjusted Cigarette Decline Rates
Adjusted Cigarette Decline Rates Smokeable Segment Total Industry Q1 '20 Q2 '20 Q3 '20 Q4 '20 Q1 '21 Q2 '21 Q1 '20 Q2 '20 Q3 '20 Q4 '20 Q1 '21 Q2 '21 1.0 % 0.5 % 0% (1.0)% (1.0)% (2.0)% (2.0)% (2.0)% (3.5)% (3.5)% (4.5)% (5.0)% 1H 2021 = 1H 2021 = (4.0)% (4.0)% Source: AVI SCMI estimates – rounded t
Slide 18: Smokeable Products Segment: Marlboro Retail Share
Smokeable Products Segment Marlboro Retail Share 43.2 43.1 43.1 43.2 42.7 ∆ vs. (0.5) +0.1 +0.2 +0.4 +0.5 YAGO Q2 '20 Q3 '20 Q4 '20 Q1 '21 Q2 '21 Source: IRI/MSAi InfoScan Cigarette 2021 – Blended, week ending 07/04/21 18 | ALCS | Q2 2021 | 7.29.21 | For Investor Purposes ONLY
Slide 19: Discount Segment Retail Share
Discount Segment Retail Share Total Discount Segment (%) Deep Discount Branded Discount 30.0 25.2 24.9 24.7 25.0 25.3 25.0 15.3 15.0 14.9 14.8 14.9 14.7 9.9 9.9 9.8 10.2 10.4 10.3 0.0 Q1 '20 Q2 '20 Q3 '20 Q4 '20 Q1 '21 Q2' 21 Source: IRI/MSAi InfoScan Cigarette 2021 – Blended, week ending 07/04/21 1
Slide 20: John Middleton Cigars
John Middleton Cigars 20 | ALCS | Q2 2021 | 7.29.21 | For Investor Purposes ONLY
Slide 21: Oral Tobacco Products Segment: Adjusted OCI Margins
Oral Tobacco Products Segment Adjusted OCI Margins* Adjusted OCI Margins Adjusted OCI Margins (1.1pp) (1.0pp) 72.8% 71.7% 72.9% 71.9% Q2 2020 Q2 2021 1H 2020 1H 2021 *For reconciliations of non-GAAP to GAAP measures visit altria.com. 21 | ALCS | Q2 2021 | 7.29.21 | For Investor Purposes ONLY
Slide 22: Oral Tobacco Products Segment Retail Share
Oral Tobacco Products Segment Retail Share (2.2pp) 50.0 47.8 Q2 2020 Q2 2021 Source: IRI/MSAi InfoScan Oral Tobacco 2021 – MOC, week ending 07/04/21 22 | ALCS | Q2 2021 | 7.29.21 | For Investor Purposes ONLY
Slide 23: E-Vapor Category Volume
E-Vapor Category Volume Estimated Equivalized Volume (in billions of units) Quarterly Estimates Q2 2021 Category ∆ 0.7 2% Q/Q Increase 15% YOY Increase 0.50 0.50 0.51 0.49 0.45 0.46 0.46 0.44 0.44 0.40 0.0 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2 '20 Q3 '20 Q4 '20 Q1 '21 Q2 '21 Source: AVI SCMI estimat
Slide 24: Our Alcohol Assets
Our Alcohol Assets All-third party trademarks remain the property of their respective owners. 24 | ALCS | Q2 2021 | 7.29.21 | For Investor Purposes ONLY
Slide 25: Ste. Michelle Wine Estates Transaction
Ste. Michelle Wine Estates Transaction 25 | ALCS | Q2 2021 | 7.29.21 | For Investor Purposes ONLY
Slide 26: Philip Morris Capital Corporation (PMCC)
Philip Morris Capital Corporation (PMCC) Net Finance Assets ($ in millions) • We continue to make progress on ($59) our wind-down of PMCC $320 $261 • We expect to continue reducing this balance in 2021 through rent and asset sales and expect to fully complete the PMCC wind-down by the end of 2022 Q4
Slide 27: Cronos Group Announces Strategic Investment in PharmaCann
Cronos Group Announces Strategic Investment in PharmaCann, a Leading U.S. Cannabis Company All-third party trademarks remain the property of their respective owners. 27 | ALCS | Q2 2021 | 7.29.21 | For Investor Purposes ONLY
Slide 28: Capital Allocation
Capital Allocation Repaid $1.5 billion of notes upon maturity Balance Sheet Debt to EBITDA* was 2.3x as of the end of the second quarter In the second quarter we paid $1.6 billion in dividends Dividends We maintain our long-term objective of a dividend target payout ratio of approximately 80
Slide 29: Corporate Responsibility Reports
Corporate Responsibility Reports Available on www.altria.com 29 | ALCS | Q2 2021 | 7.29.21 | For Investor Purposes ONLY
Slide 30: ALCS | Q2 2021 | 7.29.21 | For Investor Purposes ONLY
ALCS | Q2 2021 | 7.29.21 | For Investor Purposes ONLY