Altria Group, Inc. · NYSE:MO
Altria — Investor Day (2023)
67 slides from Altria's investor day presentation, 2023
Slide 1: Investor Day 2023
Slide 2: Mac Livingston, VP Investor Relations
Mac Livingston VP Investor Relations
Slide 3: Safe Harbor Statement
Safe Harbor Statement • Statements 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. These forward-looking statements include statements regarding plans
Slide 4: Safe Harbor Statement
Safe Harbor Statement the risk that we may be required to write down intangible assets, including trademarks and goodwill, due to impairment; the risk that we could decide, or be required to, recall products; the various risks related to health epidemics and pandemics, such as the COVID-19 pandemic,
Slide 5: Investor Day Presenters
Investor Day Presenters Billy Gifford Shannon Leistra Jody Begley Scott Myers Jennifer Hunter Chief Executive Officer Consumer Experience Officer Chief Operating Officer President & CEO Chief Sustainability Altria Group Distribution Co. Officer Paige Magness Todd Walker Megan Witherspoon Sal Mancuso
Slide 6: Billy Gifford
Billy Gifford Chief Executive Officer
Slide 7: Risk Cliff Between Combustible & Smoke-Free Tobacco
Risk Cliff Between Combustible & Smoke-Free Tobacco Higher Combustible Risk Tobacco Products Lower Risk Smoke-Free Tobacco Products Adapted from Nutt, et. Al Estimating the Harms of Nicotine-Containing Products Using the MCDA Approach. Eur. Addict Res 2014; 20:218-225. Evaluation criteria include; p
Slide 8: How We're Preparing to Capture the Harm Reduction Opportunity in the U.S.
How We’re Preparing to Capture the Harm Reduction Opportunity in the U.S. Building the Expanding our Enhancing Creating the Commercial Engine to Understanding of our Innovative Conditions for Responsibly Drive Adult Tobacco Smoke-Free Tobacco Harm Transition to Smoke- Consumers Product Efforts Reduc
Slide 9: Infrastructure to Drive Our Smoke-Free Businesses Forward
Infrastructure to Drive Our Smoke-Free Businesses Forward Digital Trade Relationships Manufacturing 9 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 10: Smokeable Segment Funding Smoke-Free Efforts and Cash Returns
Smokeable Segment Funding Smoke-Free Efforts and Cash Returns (in billions) Smokeable Segment Adjusted Cash Returns to Shareholders Operating Companies Income* (OCI) $10.4 $10.7 $10.1 $8.1 $8.4 Share $1.7 $1.8 Repurchases $6.3 $6.4 $6.6 Dividends $6.3 2020 2021 2022 2020 2021 2022 ~$23 Billion Retur
Slide 11: Marlboro is the Leading Cigarette Brand for Adult Smokers
Marlboro is the Leading Cigarette Brand for Adult Smokers FY 2022 Share 42.5 41.9 Marlboro Next 11 Brands Combined Source: IRI/MSAi InfoScan – Blended, WE 1/1/2023 11 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 12: Our Future Smoke-Free Portfolio
Our Future Smoke-Free Portfolio* E-Vapor Heated Tobacco Oral Tobacco New Internally Developed HTC New Product Internally Developed Product *Subject to closing of NJOY Transaction. All new products subject to FDA authorization. All third-party trademarks remain the property of their respective owners
Slide 13: Changes to Support our Vision
Changes to Support our Vision Product Development Enhanced Digital Organizational Design to Innovation System Capabilities & Adult Drive Innovation Tobacco Consumer Data 13 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 14: Creating the Conditions for Harm Reduction
Creating the Conditions for Harm Reduction Establish a Market Advocate for Harm of Authorized Address Nicotine Lead the Way on Reduction, Not Reduced-Harm Misperceptions Responsibility Prohibition Products 14 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 15: 2028 Enterprise Goals
2028 Enterprise Goals 2028 Enterprise Goals Corporate U.S. Smoke-Free Products Long-Term Growth Financial International Share of U.S. U.S. Policy & Total Adjusted Innovative Non-Nicotine U.S. Tobacco Smoke-Free Smoke-Free Capital OCI Margin Smoke-Free Revenue Space Volume Revenue Allocation Revenue
Slide 16: Shannon Leistra
Shannon Leistra Consumer Experience Officer
Slide 17: Understanding Adult Tobacco Consumers (ATCs)
Understanding Adult Tobacco Consumers (ATCs) ATC Data Gathered in 2022 Research ~4.5 Billion ATC ~730 Million With ~50,000 ATCs Transactions at Retail ATC Engagements with our Brands Source: Altria CMII, AGDC and D&T Estimates 17 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 18: ATC Research Findings
ATC Research Findings Unique ATC Clusters Distinct Usage Moments Barriers & Motivators 18 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 19: ATC Clusters
ATC Clusters Represent Different Product Choices, Personalities and Worldviews Familiar Embrace Experiences Innovation Community Individualistic Minded Use Smoke-Free Exclusively Products Use Cigarettes Source: CMII Analysis 19 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 20: Combustible Product Use Varies By ATC Cluster
Combustible Product Use Varies By ATC Cluster Growing Interest in Smoke-Free Products Across All of Them Tobacco Product Use by ATC Cluster Combustible Exclusive Poly-Category Smoke-Free Exclusive ~2/3rds of ATCs Source: Tobacco Landscape 2.0 I Altria Client Services 20 | For Investor Purposes ONLY
Slide 21: Distinct Usage Moments for Tobacco Enjoyment
Distinct Usage Moments for Tobacco Enjoyment Detach Engage Indulge Enhance Reward Hang-Out Break Multitask Source: CMII Analysis 21 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 22: Detach Moments
Detach Moments Occasions When ATCs Use Their Tobacco Product to Help Them Disconnect Indulge Reward Break Source: CMII Analysis 22 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 23: Detach Moments
Detach Moments Occasions When ATCs Use Their Tobacco Product to Help Them Disconnect Indulge Reward Break Source: CMII Analysis 23 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 24: Detach Moments
Detach Moments Occasions When ATCs Use Their Tobacco Product to Help Them Disconnect Indulge Reward Break Source: CMII Analysis 24 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 25: Engage Moments
Engage Moments Occasions When ATCs Want to Connect with Others and Life Around Them Enhance Hang-Out Multitask Source: CMII Analysis 25 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 26: Engage Moments
Engage Moments Occasions When ATCs Want to Connect with Others and Life Around Them Enhance Hang-out Multitask Source: CMII Analysis 26 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 27: Engage Moments
Engage Moments Occasions When ATCs Want to Connect with Others and Life Around Them Enhance Hang-Out Multitask Source: CMII Analysis 27 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 28: Not Every Moment Has the Same Level of Satisfaction
Not Every Moment Has the Same Level of Satisfaction Detach Engage Satisfaction & Enjoyment Indulge Enhance Reward Hang-Out Break Multitask Routine Source: CMII Analysis 28 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 29: Product Requirements Can Vary Depending on the Moment
Product Requirements Can Vary Depending on the Moment 29 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 30: Shifts in Key Tobacco Moments
Shifts in Key Tobacco Moments Example: How the Pandemic Disrupted Tobacco Moments Enhance Hang-Out Multitask Source: CMII Analysis 30 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 31: Barriers and Motivators to Switching
Barriers and Motivators to Switching Understanding Adult Tobacco Consumer Motives Behind Their Choices Smoke-Free Product Requirements Nicotine Satisfaction Easy to Carry Enjoyable Experience Barriers Motivators Source: CMII Analysis 31 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 32: ATC Framework Informs Enterprise-Wide Efforts
ATC Framework Informs Enterprise-Wide Efforts Simplified for Illustrative Purposes 32 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 33: Jody Begley
Jody Begley Chief Operating Officer
Slide 34: Smoke-Free Product Development Process
Smoke-Free Product Development Process Simplified for Illustrative Purposes Phase 1 Phase 2 Phase 3 Identify Unmet Product Design and Formal Regulatory ATC Needs Preliminary Regulatory Studies Preparations 34 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 35: Inhalable Alternatives Designed for Adult Smokers
Inhalable Alternatives Designed for Adult Smokers Enhance Moments Indulge Moments 35 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 36: Our Future Smoke-Free Portfolio
Our Future Smoke-Free Portfolio* E-Vapor Heated Tobacco Oral Tobacco New Internally Developed HTC New Product Internally Developed Product *Subject to closing of NJOY Transaction. All new products subject to FDA authorization. All third-party trademarks remain the property of their respective owners
Slide 37: NJOY ACE is Currently the Only Authorized Pod Product
NJOY ACE is Currently the Only Authorized Pod Product Regulatory Status of Major Pod-based E-Vapor Products It appears that PMTAs remain pending for all currently marketed Vuse Alto products. Marketing Granted Orders issued for NJOY ACE device, Market Denial Orders were issued by the FDA in June Ric
Slide 38: E-Vapor Product Requirements
E-Vapor Product Requirements Most Important Attributes when Selecting an E-Vapor Product Among Adult Smokers and Adult Vapers Product Performance Device Performance Enjoyable Flavor Puff Count Nicotine Satisfaction Easy to Use and Maintain Resistance to Draw Battery Life Fullness of Vapor Source: CM
Slide 39: E-Vapor Product and Device Performance
E-Vapor Product and Device Performance E-Vapor Device Features Post-Trial Feedback on NJOY ACE Among Adult Smokers and Adult Vapers Battery Pod Puffs* Capacity Volume per Pod (mAh) (mL) “Comfortable to hold and convenient to carry.” 400 1.9 325 NJOY ACE “A smooth inhale 350 1.8 275 that’s easy to VU
Slide 40: ATC Research: Post-Trial Purchase Intent
ATC Research % of Post-Trial Survey Participants Who “Definitely Would Buy” Listed Product Adult Smokers Adult Vapers 26% 27% Non-Menthol 19% 19% 20% 13% JUUL Vuse Alto NJOY ACE JUUL Vuse Alto NJOY ACE Non-Menthol Non-Menthol Non-Menthol Non-Menthol Non-Menthol Non-Menthol 32% 29% 30% 30% Menthol 18
Slide 41: Current NJOY Distribution
Current NJOY Distribution FY 2022 Store Count (Total U.S. excludes vape shops) 121,000 33,000 NJOY ACE Vuse Source: STARS FY 2022 All third-party trademarks remain the property of their respective owners. 41 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 42: Underage Use Prevention by NJOY
Underage Use Prevention by NJOY Usual Brand Used Among Middle & High School E-Cigarette Users Combined 2022 NYTS 20 NJOY Not Among Top Brands NJOY is developing access-restriction technology for its devices using 14.5 Bluetooth® connectivity. 12.5 Percentage (%) NJOY is preparing PMTAs with this tec
Slide 43: Our Future Smoke-Free Portfolio
Our Future Smoke-Free Portfolio* E-Vapor Heated Tobacco Oral Tobacco New Internally Internally Developed Developed HTC New HTC Product Internally Product Developed Product *Subject to closing of NJOY Transaction. All new products subject to FDA authorization. All third-party trademarks remain the pr
Slide 44: Our Partnership with JT Group
Our Partnership with JT Group All third-party trademarks remain the property of their respective owners. 44 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 45: Altria's Framework for Reduced Harm Tobacco Products
Our Partnership with JT Group Collaborating to Deliver Substantial Scientific Support Altria’s Framework for Reduced Harm Tobacco Products Constituent Reduction Risk Reduction Individual Harm Reduction Population Chemical & Perception & Risks & Benefits Product Design & Toxicology & Risk Studies in
Slide 46: Internally Developed Heated Tobacco Capsule Product
Internally Developed Heated Tobacco Capsule Product • Some adult smokers are interested in innovative heated tobacco products that bear less physical resemblance to traditional cigarettes. • This includes the millions of U.S. smokers who tried, but ultimately rejected, e-vapor products. • These cons
Slide 47: Our Heated Tobacco Capsule Product
Our Heated Tobacco Capsule Product • Using our proprietary technology, tobacco- filled capsules are heated to deliver a satisfying inhale that is similar to a cigarette. • Each capsule is single use and lasts for one tobacco occasion. • SWIC features a simple and intuitive user experience. Product a
Slide 48: Adult Smoker Intentions to Try and Use SWIC
Adult Smoker Intentions to Try and Use SWIC AS Intention to Try SWIC AS Intention to Use SWIC Higher Intentions Lower Intentions Did not view marketing Viewed marketing Did not view marketing Viewed marketing materials materials materials materials Intentions to try and use among non-tobacco consume
Slide 49: Our Future Smoke-Free Portfolio
Our Future Smoke-Free Portfolio* E-Vapor Heated Tobacco Oral Tobacco New Internally Developed Product *Subject to closing of NJOY Transaction. All new products subject to FDA authorization. All third-party trademarks remain the property of their respective owners. 49 | For Investor Purposes ONLY | I
Slide 50: Moist Smokeless Tobacco
Moist Smokeless Tobacco 50 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 51: Copenhagen's Long-Standing Leadership
Copenhagen’s Long-Standing Leadership 51 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 52: Cope Rewards Resonates with Adult Dippers
Cope Rewards Resonates with Adult Dippers 52 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 53: Oral Tobacco Products Segments
Oral Tobacco Products Segments Adjusted OCI Margins* 66.3% FY 2022 *For reconciliations of non-GAAP to GAAP measures visit altria.com. 53 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 54: Oral Nicotine Pouch (ONP) Category Dynamics
Oral Nicotine Pouch (ONP) Category Dynamics ONP Category Sourcing ONP Repurchase Index (By Primary Tobacco Category) Usual Cigarette Brand Marlboro 89 Cigarettes MST & Snus Other Tobacco Products Pall Mall 91 Balance Discount 100 11% L&M 115 Camel 160 Nat. American Spirit 173 45% Total Cigarettes 10
Slide 55: Nicotine Pouch Moments
Nicotine Pouch Moments Hang-Out Moments Multitask Moments 55 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 56: Impressive Performance from on!
Impressive Performance from on! on! Share of Nicotine Pouch (Total U.S.) +2.5pp 24.0 21.5 Q4 '21 Q4 '22 Source: IRI InfoScan Oral Tobacco MOC, WE 1/01/23 56 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 57: on! Sourcing Dynamics
on! Sourcing Dynamics Volume Sourcing Demographics1 (By Primary Tobacco Category) Other Tobacco Products Competitive Nicotine Pouch on! on! 55% 45% MST & Snus Cigarettes Age 21-39 Age* 8% Cigarette Category 30% 70% Total Cigarettes Age 40+ 17% Total MST MST Category 45% 55% 29% on! 30% 70% Gender Fe
Slide 58: on! Brand Awareness Continues to Grow
on! Brand Awareness Continues to Grow Awareness of on! (Among Total ATCs 21-54) 57 41 22 Q4'20 Q4'21 Q4'22 Source: 2022 Nicotine Pouch Awareness & Perceptions Tracker – Q4 2022 Results based on total aided and unaided brand awareness 58 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 59: Increased on! Trial and Repurchases
Increased on! Trial and Repurchases on! Retail Sales Volume (in Millions of Cans) Estimated Repeat Purchase Estimated Trial 22 20 19 3 3 16 4 15 12 4 5 8 4 19 17 6 15 3 2 11 11 8 4 5 Q1 '21 Q2 '21 Q3 '21 Q4 '21 Q1 '22 Q2 '22 Q3 '22 Q4 '22 Helix reduced on! promotional spend per can by approximately
Slide 60: Reductions in Biomarkers of Exposure (BOE)
Reductions in Biomarkers of Exposure (BOE) Relative to Tobacco Cessation and Continued Smoking Reductions in BOE Among on! Use Groups Cigarette 0 1 2 3 4 Use Group -10 Percent Reduction (%) -20 -30 -40 -50 -60 -70 -80 Tobacco -90 Cessation -100 Groups Carcinogens Respiratory Reproductive & Cardiovas
Slide 61: Limited Nicotine Pouch Use Among Middle and High School Students
Limited Nicotine Pouch Use Among Middle and High School Students National Youth Tobacco Survey 2021-2022 Current (past 30-day) Nicotine Pouch Use Among Middle & High School Students Combined 10% 0.8% 1.1% 0% 2021 2022 Sources: Tobacco Product Use and Associated Factors Among Middle and High School S
Slide 62: Expanding Our Oral Tobacco Portfolio
Expanding Our Oral Tobacco Portfolio New Internally Developed Product New products are subject to FDA authorization. 62 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 63: Nicotine Pouches Designed for Adult Dippers & Dual Users
Nicotine Pouches Designed for Adult Dippers & Dual Users on! PLUS Features A Wet, Spit-Free Tobacco-Derived Nicotine Pouch Product • An optimized flavor system and range of nicotine strengths. • A pouch that’s larger* than any other tobacco-derived nicotine pouch on the U.S. market. • A seamless pou
Slide 64: % Reduction in HPHC Levels of on! PLUS 6mg Product
% Reduction in HPHC Levels of on! PLUS 6mg Product Compared to Grizzly Long Cut Wintergreen >91% >96% 100% 80% 60% 40% Not Detectable 20% 0% NNK NNN B[a]P Arsenic Cadmium Crotonaldehyde Acetaldehyde Formaldehyde As=Arsenic; B[a]P=Benzo[a]pyrene; BLOQ=Below Limit of Quantitation; Cd=Cadmium; NNK=4-(m
Slide 65: Our Future Smoke-Free Product Portfolio
Our Future Smoke-Free Product Portfolio* *Subject to closing of NJOY Transaction. All new products subject to FDA authorization. All third-party trademarks remain the property of their respective owners. 65 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 66: Smoke-Free Enterprise Goals
Smoke-Free Enterprise Goals 2028 Enterprise Goals Corporate U.S. Smoke-Free Products Long-Term Growth International Financial Policy U.S. U.S. Share of U.S. Total Adjusted Innovative Non-Nicotine & Capital Smoke-Free Smoke-Free Tobacco Space OCI Margin Smoke-Free Revenue Allocation Volume Revenue Re
Slide 67: Sone
FS) ce Sone Seales