Altria Group, Inc. · NYSE:MO
Altria — Q4 2021 Earnings Presentation
32 slides from Altria's earnings presentation, Jan 27, 2022
Slide 1: Altria's Fourth-Quarter 2021 Earnings Conference Call
Altria’s Fourth-Quarter 2021 Earnings Conference Call January 27, 2022 1 | ALCS | Q4 2021 | 01.27.22 | 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: Moving Beyond Smoking
Responsibly lead the transition Moving Beyond Smoking™ of adult smokers to a smoke-free future 3 | ALCS | Q4 2021 | 01.27.22 | For Investor Purposes ONLY | Final
Slide 4: Strong Earnings Growth & Cash Returns to Shareholders
Strong Earnings Growth & Cash Returns to Shareholders Adjusted Diluted Cash Returned to Shareholders Earnings Per Share* ($ in billions) +5.7% $8.1 $7.7 $7.1 $6.9 $4.61 $4.36 $6.3 FY 2020 FY 2021 2017 2018 2019 2020 2021 *For reconciliations of non-GAAP to GAAP measures visit altria.com. $36.1 Billi
Slide 5: 2021 Progress Toward Our Vision
2021 Progress Toward Our Vision • Accelerating the retail share growth of on! • Advancing the science, research and development behind our smoke-free products • Advocating for tobacco harm reduction • Making strides in establishing a best-in-class consumer engagement system 5 | ALCS | Q4 2021 | 01.2
Slide 6: Achievements Across Our Responsibility Focus Areas
Achievements Across Our Responsibility Focus Areas All-third party trademarks remain the property of their respective owners. 6 | ALCS | Q4 2021 | 01.27.22 | For Investor Purposes ONLY | Final
Slide 7: Tobacco Space Estimated Volume
Tobacco Space Estimated Volume Equivalized Volume in Billions Combustible Oral Tobacco E-Vapor (0.8)% CAGR 16.3 16.0 16.0 15.9 15.7 15.7 1.0 1.1 ~16% 1.6 1.9 1.8 1.6 1.6 2.0 1.6 ~24% 1.6 1.7 1.8 13.8 13.4 12.9 12.2 12.4 11.8 2016 2017 2018 2019 2020 2021 Note: annual volume for Heated Tobacco produc
Slide 8: Accelerating on! Retail Share Growth
Accelerating on! Retail Share Growth on! Share of Oral Tobacco Category (total U.S.) 3.9 3.0 2.0 1.7 1.1 Q4 '20 Q1 '21 Q2 '21 Q3 '21 Q4 21 Source: IRI InfoScan Oral Tobacco MOC, WE 01/02/22 8 | ALCS | Q4 2021 | 01.27.22 | For Investor Purposes ONLY | Final
Slide 9: 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 (Q4 2021 vs. Q4 2020) +7.4pp 17.9 47% 38% 10.5 3.5 2.8 9% 6% 0.7 0.4 Q4 2020 Q4 2021 Zyn on! Velo Other Source: IRI InfoScan Oral Tobacco MOC, WE 01/02/22 9 | ALCS | Q4 2021 | 01.27
Slide 10: IQOS Update
IQOS Update All third-party trademarks remain the property of their respective owners. 10 | ALCS | Q4 2021 | 01.27.22 | For Investor Purposes ONLY | Final
Slide 11: Knowledge Gained From IQOS Commercialization Efforts
Knowledge Gained From IQOS Commercialization Efforts Our teams learned how to: IQOS Device Penetration % • educate U.S adult smokers on a ATL CLT NoVA brand-new tobacco category and how to effectively support their transition journey to smoke-free alternatives; • leverage modified risk tobacco produ
Slide 12: 2021 Monitoring the Future Survey Results
2021 Monitoring the Future Survey Results Past 30-day tobacco products use among 8 th, 10th & 12th grades combined 35 Vaping Nicotine JUUL Percentage (%) 18.1 18.0 15.8 13.3 14.2 10.4 7.5 4.8 0 +26% +8% +2% (20%) (1%) 2017 2018 2019 2020 2021 Sources: ALCS analysis of 2017-2021 of 2021 MTF 8th, 10th
Slide 13: Tobacco Regulatory Update
Tobacco Regulatory Update Smoke-Free Products E-Vapor Products • The FDA has issued marketing denial orders for many e-vapor premarket tobacco product applications (PMTA), primarily for open systems and flavored e-liquids. PMTAs for the leading e-vapor products, including JUUL, are still in FDA revi
Slide 14: Tobacco Regulatory Update (continued)
Tobacco 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 Office of Management & Scientific Advisory proposed rule Budget (OMB)
Slide 15: U.S. Tobacco Harm Reduction Opportunity
U.S. Tobacco Harm Reduction Opportunity 1 Adapted from Nutt, et al. Estimating the Harms of Nicotine-Containing Products Using the MCDA Approach. Eur. Addict Res 2014; 20 :218-225. 15 | ALCS | Q4 2021 | 01.27.22 | For Investor Purposes ONLY | Final
Slide 16: 16 | ALCS | Q4 2021 | 01.27.22 | For Investor Purposes ONLY |
16 | ALCS | Q4 2021 | 01.27.22 | For Investor Purposes ONLY | Final
Slide 17: 2022 Financial Outlook
2022 Financial Outlook • Our plans for the year ahead include a continuation of our strategy to balance earnings growth and shareholder returns with investments toward our Vision. • For 2022, our planned investment areas include: (i) digital consumer engagement, (ii) smoke-free product research, dev
Slide 18: Macroeconomic Influences on Adult Tobacco Consumers
Macroeconomic Influences on Adult Tobacco Consumers Personal Disposable Income Consumer Mobility 80% % Change vs. Prior Quarter Time Outside Home Index, Weekly 54.7% 0 48.5% Q4 Q4 ‘20 ‘21 3.1% -4.3% -4.9% -8.3% -16.6% -29.1% -40% -100 Q1 '20 Q2 '20 Q3 '20 Q4' 20 Q1 '21 Q2 '21 Q3 '21 Q4 '21 Oct-20 Oc
Slide 19: 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 WE 01/03/2022 as of 01/12/22 1 Store reporting
Slide 20: Q4 2021: Smokeable Products Segment
Q4 2021: Smokeable Products Segment Adjusted Operating Companies Income* (OCI) and Adjusted OCI Margins* Adjusted OCI Adjusted OCI Margins ($ in millions) +4.9% +1.4pp $2,504 $2,388 54.8% 56.2% Q4 2020 Q4 2021 Q4 2020 Q4 2021 *For reconciliations of non-GAAP to GAAP measures visit altria.com. 20 | A
Slide 21: Adjusted Cigarette Decline Rates - Quarterly
Adjusted Cigarette Decline Rates - Quarterly Smokeable Segment Total Industry Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 '20 '20 '20 '20 '21 '21 '21 '21 '20 '20 '20 '20 '21 '21 '21 '21 1.0 % 0.5 % 0% (1.0)% (1.0)% (2.0)% (2.0)% (2.0)% (3.5)% (3.5)% (4.5)% (5.0)% (7.0)% (6.5)% (6.5)% (8.0)% Sour
Slide 22: FY 2021: Smokeable Products Segment
FY 2021: Smokeable Products Segment Adjusted OCI* and Adjusted OCI Margins* Adjusted OCI Adjusted OCI Margins ($ in millions) +3.1% +1.2pp $10,424 57.6% $10,111 56.4% FY 2020 FY 2021 FY 2020 FY 2021 *For reconciliations of non-GAAP to GAAP measures visit altria.com. 22 | ALCS | Q4 2021 | 01.27.22 |
Slide 23: Adjusted Cigarette Decline Rates - Annual
Adjusted Cigarette Decline Rates - Annual Smokeable Segment Total Industry 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 0.0 % (2.0)% (4.0)% (4.5)% (3.5)% (5.5)% (5.5)% (5.5)% (6.0)% (7.0)% Source: AVI SCMI estimates – rounded to nearest 0.5% Note: Estimates are subject to revision due to wholes
Slide 24: Smokeable Products Segment – Marlboro Retail Share
Smokeable Products Segment – Marlboro Retail Share Quarterly Annual 43.1 43.2 43.2 43.1 43.1 42.9 42.7 ∆ vs. YAGO +0.4 +0.5 - (0.4) +0.1 Q1 '21 Q2 '21 Q3 '21 Q4' 21 2019 2020 2021 Source: IRI/MSAi InfoScan Cigarette 2021 – Blended, WE 01/02/22 24 | ALCS | Q4 2021 | 01.27.22 | For Investor Purposes O
Slide 25: Discount Segment Retail Share
Discount Segment Retail Share Total Discount Segment (%) Deep Discount Branded Discount 30.0 26.0 25.2 24.9 24.7 25.0 25.3 25.0 25.3 14.9 15.3 15.0 14.8 14.9 14.7 14.8 14.9 9.9 9.9 10.2 10.4 10.3 10.5 11.1 9.8 0.0 Q1 '20 Q2 '20 Q3 '20 Q4 '20 Q1 '21 Q2 '21 Q3 '21 Q4 '21 Source: IRI/MSAi InfoScan Ciga
Slide 26: John Middleton Cigars
John Middleton Cigars Reported Shipment Volume (in millions) +0.2% 1,800 1,803 FY 2020 FY 2021 26 | ALCS | Q4 2021 | 01.27.22 | For Investor Purposes ONLY | Final
Slide 27: FY 2021: Oral Tobacco Products Segment
FY 2021: Oral Tobacco Products Segment Adjusted OCI* and Adjusted OCI Margins* Adjusted* OCI Adjusted* OCI Margins ($ in millions) (1.6%) (3.2pp) $1,724 $1,696 71.7% 68.5% FY 2020 FY 2021 FY 2020 FY 2021 *For reconciliations of non-GAAP to GAAP measures visit altria.com. 27 | ALCS | Q4 2021 | 01.27.
Slide 28: Oral Tobacco Products Segment Retail Share
Oral Tobacco Products Segment Retail Share MST + Snus on! 49.2 1.1 48.1 47.8 47.8 47.6 1.7 2.0 3.0 3.9 48.1 46.4 45.8 44.8 43.7 Q4 '20 Q1 '21 Q2 '21 Q3 '21 Q4 '21 Source: IRI/MSAi InfoScan Oral Tobacco 2021 – MOC, WE 01/02/22 28 | ALCS | Q4 2021 | 01.27.22 | For Investor Purposes ONLY | Final
Slide 29: Adjusted Equity Earnings From ABI Investment
Adjusted Equity Earnings* From ABI Investment $ in millions +9.6% +18.3% $639 $540 $157 $172 Q4 2020 Q4 2021 FY 2020 FY 2021 *For reconciliations of non-GAAP to GAAP measures visit altria.com. 29 | ALCS | Q4 2021 | 01.27.22 | For Investor Purposes ONLY | Final
Slide 30: Philip Morris Capital Corporation (PMCC)
Philip Morris Capital Corporation (PMCC) Net Finance Assets ($ in millions) • We continue to make progress on ($206) our wind-down of PMCC $320 • As previously announced, we expect to fully complete the PMCC wind-down by the end of 2022 $114 YE 2020 YE 2021 30 | ALCS | Q4 2021 | 01.27.22 | For Inves
Slide 31: Shareholder Value Creation
Shareholder Value Creation ▪ Paid $6.4 billion in dividends in 2021. Dividends ▪ Raised the dividend for the 56th time in the past 52 years. ▪ Repurchased 35.7 million shares totaling $1.7 billion in 2021. Share ▪ Sold Ste. Michelle Wine Estates and expanded our share repurchase program from $2 bill
Slide 32: Moving Beyond Smoking
Responsibly lead the transition Moving Beyond Smoking™ of adult smokers to a smoke-free future 32 |