Slide 1: Altria's Fourth-Quarter 2022 Earnings Conference Call
Altria’s Fourth-Quarter 2022 Earnings Conference Call February 1, 2023 1 | ALCS | Q4 2022 | 2.1.23 | 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: Strong Performance & Cash Returns to Shareholders
Strong Performance & Cash Returns to Shareholders Adjusted Diluted Earnings Per Share (EPS)* Cash Returns to Shareholders ($ in billions) +5.0% $8.4 $4.84 $8.1 $4.61 $7.1 $6.9 $6.3 FY 2021 FY 2022 2018 2019 2020 2021 2022 *For reconciliations of non-GAAP to GAAP measures visit altria.com. $36.8 Bill
Slide 4: 2022 Progress Toward Our Vision
2022 Progress Toward Our Vision • Accelerating the growth of on! nicotine pouches • Creating long-term optionality for our inhalable smoke-free product portfolio • Enhancing our digital consumer engagement • Continuing to advocate for tobacco harm reduction 4 | ALCS | Q4 2022 | 2.1.23 | For Investor
Slide 5: Impressive Performance from on!
Impressive Performance from on! on! Shipment Volume on! Share of Oral Tobacco on! Share of Nicotine Pouch (cans in millions) (total U.S.) (total U.S.) +70% +2.1pp +2.5pp 95 7 30 82.5 5.9 23.4 24.0 23.1 5.2 21.5 21.4 4.9 4.1 3.8 48.4 0 0 0 FY 2021 FY 2022 Q4 '21 Q1 '22 Q2 '22 Q3 '22 Q4 '22 Q4 '21 Q1
Slide 6: Update: Product Development
Update: Product Development 6 | ALCS | Q4 2022 | 2.1.23 | For Investor Purposes ONLY
Slide 7: Our Partnership with JT Group
Our Partnership with JT Group All third-party trademarks remain the property of their respective owners. 7 | ALCS | Q4 2022 | 2.1.23 | For Investor Purposes ONLY
Slide 8: Optionality in E-Vapor
Optionality in E-Vapor • As we previously announced, we elected to be released from the non-compete obligations related to our JUUL investment. We retain our economic stake in JUUL. • E-vapor remains the largest smoke-free category in the U.S. and the most successful category in transitioning U.S. a
Slide 9: Responsible Digital Consumer Engagement
Responsible Digital Consumer Engagement Step 1: Electronic Age & Identity Verification Step 2: Access to Brand Messaging on Retailer Owned Digital Platforms on Retailer Owned Digital Platforms Once Verified 21+ All third-party trademarks remain the property of their respective owners. 9 | ALCS | Q4
Slide 10: Tobacco Regulatory Update
Tobacco Regulatory Update In December, the Reagan-Udall Foundation published its Operational Evaluation of Certain Components of FDA’s Tobacco Program. We were among the stakeholders who provided input to this evaluation. Among its recommendations, the report urges the FDA to: (i) clearly define pro
Slide 11: Tobacco Space Estimated Volume
Tobacco Space Estimated Volume Equivalized Volume in Billions Combustible Oral Tobacco E-Vapor (1.7%) CAGR 16.0 16.0 15.7 15.9 15.6 1.1 1.6 14.7 ~17% 1.9 1.8 2.0 1.6 2.0 1.6 1.7 1.6 1.8 ~26% 1.8 13.4 12.9 12.2 12.4 11.8 10.9 2017 2018 2019 2020 2021 2022 Sources: CMII Estimates; IRI MOC; Capstone; C
Slide 12: 2023 Financial Outlook
2023 Financial Outlook • Our planned investment areas include: (i) continued smoke-free product research, development and regulatory preparations, (ii) digital consumer engagement and (iii) marketplace activities in support of our smoke-free products. • We expect to deliver 2023 full-year adjusted 1
Slide 13: 13 | ALCS | Q4 2022 | 2.1.23 | For Investor Purposes ONLY
13 | ALCS | Q4 2022 | 2.1.23 | For Investor Purposes ONLY
Slide 14: Honoring W. Leo Kiely III
Honoring W. Leo Kiely III 14 | ALCS | Q4 2022 | 2.1.23 | For Investor Purposes ONLY
Slide 15: Q4 2022: Smokeable Products Segment
Q4 2022: Smokeable Products Segment Adjusted Operating Companies Income* (OCI) and Adjusted OCI Margins* Adjusted OCI Adjusted OCI Margins ($ in millions) +4.0% +2.2pp 58.4% 56.2% $2,603 $2,504 Q4 2021 Q4 2022 Q4 2021 Q4 2022 *For reconciliations of non-GAAP to GAAP measures visit altria.com. 15 | A
Slide 16: FY 2022: Smokeable Products Segment
FY 2022: Smokeable Products Segment Adjusted OCI* and Adjusted OCI Margins* Adjusted OCI Adjusted OCI Margins ($ in millions) +2.9% +1.4pp $10,726 $10,424 57.6% 59.0% (0.4) FY 2021 FY 2022 FY 2021 FY 2022 *For reconciliations of non-GAAP to GAAP measures visit altria.com. 16 | ALCS | Q4 2022 | 2.1.2
Slide 17: Executing Our Strategy in Smokeable
Executing Our Strategy in Smokeable Adjusted OCI* ($ in billions) +4.7% CAGR $10.7 $10.4 $10.1 $9.2 $8.5 $8.4 2017 2018** 2019 2020 2021 2022 Adjusted 51.0% 50.6% 54.5% 56.4% 57.6% 59.0% OCI Margins* *For reconciliations of non-GAAP to GAAP measures visit altria.com. **2018 reduction in adjusted OCI
Slide 18: Adjusted Cigarette Decline Rates
Adjusted Cigarette Decline Rates Smokable Segment Total Industry Q4 2021 Q4 2022 FY 2021 FY 2022 Q4 2021 Q4 2022 FY 2021 FY 2022 (5.5%) (6.0%) (6.5%) (8.0%) (8.0%) (9.0%) (9.5%) (11.0%) Source: ALCS CMII estimates – rounded to nearest 0.5% Note: Estimates are subject to revision due to wholesaler re
Slide 19: Industry Discount Segment Retail Share
Industry Discount Segment Retail Share Branded Discount Deep Discount 26.9 25.1 25.5 15.2 15.0 14.8 10.7 11.7 10.1 FY 2020 FY 2021 FY 2022 Source: IRI/MSAi InfoScan – Blended, WE 1/1/2023 19 | ALCS | Q4 2022 | 2.1.23 | For Investor Purposes ONLY
Slide 20: Marlboro Share Performance
Marlboro Share Performance Marlboro Retail Share (Full Year) (0.4pp) 42.9% 42.5% FY 2021 FY 2022 Source: IRI/MSAi InfoScan – Blended, WE 1/1/2023 20 | ALCS | Q4 2022 | 2.1.23 | For Investor Purposes ONLY
Slide 21: Marlboro Leadership in the Premium Segment
Marlboro Leadership in the Premium Segment Share of Premium (FY 2022) 58.2 16.2 10.6 6.6 4.4 Marlboro Newport Camel Natural American Spirit Winston, Kool & Salem Premium Share Δ +1.0 (0.9) (0.7) +0.6 - Since FY 2019 Source: IRI/MSAi InfoScan – Blended, WE 1/1/2023 21 | ALCS | Q4 2022 | 2.1.23 | For
Slide 22: John Middleton Cigars
John Middleton Cigars Reported Shipment Volume (in millions) (4.0%) 1,803 1,731 FY 2021 FY 2022 22 | ALCS | Q4 2022 | 2.1.23 | For Investor Purposes ONLY
Slide 23: FY 2022: Oral Tobacco Products Segment
FY 2022: Oral Tobacco Products Segment Adjusted OCI* and Adjusted OCI Margins* Adjusted OCI Adjusted OCI Margins ($ in millions) (3.8%) (2.2pp) $1,696 $1,632 68.5% 66.3% FY 2021 FY 2022 FY 2021 FY 2022 *For reconciliations of non-GAAP to GAAP measures visit altria.com. 23 | ALCS | Q4 2022 | 2.1.23 |
Slide 24: Oral Tobacco Share
Oral Tobacco Share Oral Tobacco Products Segment Share of Traditional MST & Snus Retail Share MST + Snus on! Copenhagen Grizzly 47.7 46.4 Δ Since 2.6 2019 31.5 31.2 30.8 29.9 (1.6) 5.0 45.1 41.4 (0.3) 34.9 34.8 34.8 34.6 FY 2021 FY 2022 FY 2019 FY 2020 FY 2021 FY 2022 Source: IRI/MSAi InfoScan Oral
Slide 25: ABI Investment
ABI Investment All third-party trademarks remain the property of their respective owners. 25 | ALCS | Q4 2022 | 2.1.23 | For Investor Purposes ONLY
Slide 26: Philip Morris Capital Corporation (PMCC)
Philip Morris Capital Corporation (PMCC) In our all other operating category, we have completed our wind-down of PMCC and no finance assets remain. I would like to thank all of our PMCC employees who worked over the years and those who helped us complete a successful wind- down. 26 | ALCS | Q4 2022
Slide 27: Capital Structure
Capital Structure Debt-to-EBITDA* 2.5x • 4.0% weighted average coupon as of December 31, 2022, a decrease of 0.2pp over 2.1x Guidance the past three years • We expect to retire approximately $1.3 billion of notes coming due later this month with available cash YE 2019 YE 2022 *For reconciliations of
Slide 28: Significant Cash Returns to Shareholders
Significant Cash Returns to Shareholders Cash Returns to Shareholders $8.4 B $8.1 B • Raised the dividend for the 57th time in 53 Share $1.7 B $1.8 B years Repurchases Guidance • Completed our previously authorized $3.5 billion share repurchase program • Earlier this week, our Board of Directors $6.
Slide 29: 29 | ALCS | Q4 2022 | 2.1.23 | For Investor Purposes ONLY
29 | ALCS | Q4 2022 | 2.1.23 | For Investor Purposes ONLY