Altria Group, Inc. · NYSE:MO
Altria — CAGNY 2022
35 slides from Altria's conference presentation, Feb 22, 2022
Slide 1: CAGNY 2022
CAGNY 2022 1| For Investor Presentation ONLY | CAGNY 2021 | 2.17.2021
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: Our Responsibility Focus Areas
Our Responsibility Focus Areas ENVIRONMENTAL SOCIAL GOVERNANCE 3 | For Investor Presentation ONLY | CAGNY 2022 | 2.22.2022
Slide 4: Investments in Support of Our Vision
Investments in Support of Our Vision • Deepen our understanding of U.S. adult tobacco consumers (ATC) and our digital consumer engagement Combustible Tobacco • Increase adult smoker transition to our in-market smoke-free products Products • Accelerate smoke-free product research, development and reg
Slide 5: Adult Smoker Interest in Smoke-free Products
Adult Smoker Interest in Smoke-free Products ~3 Year Tobacco Consumer Purchase Data By Purchase Stage Transition Purchase Stages* All Adult Smokers 21+ Tried Smoke-free Product Continued to Purchase Product After 5 Weeks Continued to Purchase Product After 18 Weeks Source: POS Scan Loyalty Data; LID
Slide 6: Meeting ATC Expectations
Meeting ATC Expectations 6 | For Investor Presentation ONLY | CAGNY 2022 | 2.22.2022
Slide 7: Our Holistic View of the Adult Smoker
Our Holistic View of the Adult Smoker Using Behavioral Science and Research to Deepen our Insights Consumer Usage Product Lifestyles and Occasions Requirements Behaviors Information Barriers and Purchasing Needed For Motivators Channels Informed Choice 7 | For Investor Presentation ONLY | CAGNY 2022
Slide 8: U.S. Tobacco Retail Landscape
U.S. Tobacco Retail Landscape ATC Shopping Behavior Tobacco* Volume By Nielsen County (When Purchasing Tobacco Products) (FY 2021) More Metro More Rural No Store Preference 9% 33% 2-3 Preferred Stores 16% 27% 21% 19% 1 Preferred Store 75% Nielsen A Nielsen B Nielsen C Nielsen D Source: AVI SCMI Path
Slide 9: Digital is Driving Awareness and Engagement
Digital is Driving Awareness and Engagement ATC Source of New Tobacco Product Awareness ATC Source of IQOS Awareness 52% 46% 39% 36% 35% 29% 24% 26% 17% 13% Direct Mail Received a Word of Store Digital Direct Mail Media Word of Store Digital Coupon Mouth Mouth Source: AVI SCMI Path to Purchase Study
Slide 10: Age Validation Technology
Age Validation Technology Stores with Age Validation Technology Installed In Progress 36,000 ~80% of PM USA Volume 104,000 Nicotine Strength Source: STARS Unify Reporting CY 2021 Ending 01-02-22, FOCUS Reporting through 1.2.22 10 | For Investor Presentation ONLY | CAGNY 2022 | 2.22.2022
Slide 11: Responsible Digital Engagement at Retail
Responsible Digital Engagement at Retail Step 1: Electronic Age & Step 2: Access to Brand Messaging Identity Verification On Retailer Owned Digital Platforms Once verified All-third party trademarks remain the property of their respective owners. 11 | For Investor Presentation ONLY | CAGNY 2022 | 2.
Slide 12: Creating a Unified and Real-Time ATC Identity
Creating a Unified and Real-Time ATC Identity Advanced Retail Scan Data Analytics Behavioral ATC Database Science Insights 12 | For Investor Presentation ONLY | CAGNY 2022 | 2.22.2022
Slide 13: Oral Nicotine Pouch (ONP) Category Dynamics
Oral Nicotine Pouch (ONP) Category Dynamics ONP Category Sourcing ONP Repurchase Index (By Primary Tobacco Category) (By Usual Cigarette Brand) 175 Other Tobacco 10% 163 150 MST & Snus 30% 113 100 100 100 Cigarettes 60% 38 Total ONP* Total Camel Natural L&M Deep Pall Mall Marlboro Newport Cigarettes
Slide 14: ONP Retail Share Momentum
ONP Retail Share Momentum ONP Share of Total Oral Tobacco Altria Group Distribution Company (AGDC) (Total U.S. and by AGDC Region) Region Map 30.0 17.9 17.0 14.3 11.7 AK ∆ vs. +7.4 +9.4 +5.6 +6.8 +9.9 +7.5 Q4 ‘20 HI Region 1 Region 2 Total U.S. Region 1 Region 2 Region 3 Region 4 Region 3 Region 4 S
Slide 15: on! Retail Share Momentum
on! Retail Share Momentum on! Share of Total ONP (Total U.S. and by AGDC Region) Total U.S. Region 1 Region 2 Region 3 Region 4 32.2 24.5 21.6 20.9 16.9 15.4 13.4 10.8 11.7 7.1 Q4 ‘20 Q4 ‘21 Q4 ‘20 Q4 ‘21 Q4 ‘20 Q4 ‘21 Q4 ‘20 Q4 ‘21 Q4 ‘20 Q4 ‘21 Source: IRI InfoScan Oral Tobacco MOC, WE 01/02/2022
Slide 16: Increased on! Trial and Repurchases
Increased on! Trial and Repurchases on! Sales Volume (In Millions of Cans) ~5x Repeat Purchase Trial Growth in Trial* 15 12 >3x 6 8 Growth in repeat 4 purchases* Q4 '20 Q1 '21 Q2 '21 Q3 '21 Q4 '21 Source: SCMI Estimates based on IRI Projected (MOC) data as of week ending 1/2/2022 and POS Scan Data a
Slide 17: on! Sourcing Dynamics
on! Sourcing Dynamics Category Sourcing Demographics (By Primary Tobacco Category) Cigarettes MST & Snus ZYN Zyn 70% 30% Competitive Nicotine Pouch Other Tobacco Products on! on! 60% 40% Age 21-39 Age* 5% 10% 10% CigaretteCategory Category Age 40+ 5% Cigarette 35% 65% 20% MSTCategory MST Category 45
Slide 18: on! ATC Testimonials
on! ATC Testimonials Source: on! ATC 21+ Testimonials Qualitative Research Final Report 2021 18 | For Investor Presentation ONLY | CAGNY 2022 | 2.22.2022
Slide 19: on!'s Product Portfolio
on!’s Product Portfolio on! Volume* Contribution by Flavor on! Volume* Contribution by Strength 8MG 4MG 2MG Other** 10% 2 MG 19% Citrus 15% Cinnamon 19% 4 MG 39% Wintergreen 27% 8 MG 42% Mint 29% Flavor Strength Source: IRI Projected (MOC) data as of week ending 1/2/2022 *Certain flavors and strengt
Slide 20: Helix Regulatory Update
Helix Regulatory Update Source: on! ATC 21+ Testimonials Qualitative Research Final Report 2021 20 | For Investor Presentation ONLY | CAGNY 2022 | 2.22.2022
Slide 21: Impact of Proposed MRTP Claims on Adult Smoker
Impact of Proposed MRTP Claims on Adult Smoker (AS) AS Intention to Try on! AS Intention to Use on! Higher Intentions Lower Intentions Did Not View Claims Viewed Claims Did Not View Claims Viewed Claims Source: Claim Comprehension & Intentions Study (CCIS) for the Products Currently Marketed as on!®
Slide 22: Heated Tobacco and E-Vapor
Heated Tobacco and E-Vapor IQOS JUUL ▪ Steady progress building the heated tobacco ▪ Our minority investment remains subject to a category in our early markets challenge by the Federal Trade Commission ▪ We demonstrated improved performance in ▪ JUUL awaits determinations from the U.S. Food each suc
Slide 23: Our Product Approach
Our Product Approach ▪ We expect to vigorously compete in the major smoke-free categories through our investments, licensing agreements and tobacco operating companies ▪ We believe it’s important to have multiple products in these smoke-free categories to help smokers transition away from cigarettes
Slide 24: Consumer Centric Product Development
Consumer Centric Product Development ▪ Conducted more than 40 consumer research studies involving thousands of tobacco consumers Consumer Early-Stage ▪ Performed more than 15,000 scientific analyses Data & Regulatory on prospective smoke-free products Insights Alignment ▪ Developed several encouragi
Slide 25: 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 1.7 ~24% 1.6 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 26: Adjusted Annual Cigarette Decline Rates
Adjusted Annual Cigarette Decline Rates Total Industry 2017 2018 2019 2020 2021 0.0 % (4.0)% (4.5)% (5.5)% (5.5)% (3.0)% 2-year Average Source: AVI SCMI estimates – rounded to nearest 0.5% Note: Estimates are subject to revision due to wholesaler resubmission of inventory data 26 | For Investor Pres
Slide 27: Smokeable Products Segment
Smokeable Products Segment Adjusted Operating Companies Income (OCI) Growth & Adjusted OCI Margins Growth* +5.5% CAGR $10.4 Smokeable $10.1 $9.2 Products $8.5 $8.4 $8.0 Adjusted OCI in billions Adjusted 2016 2017 2018 2019 2020 2021 OCI 48.0% +9.6 percentage points 57.6% Margins *For reconciliations
Slide 28: Marlboro Performance
Marlboro Performance Marlboro Retail Share Marlboro Share of Premium Segment - +0.6pp 57.1 57.2 57.7 43.1 42.9 43.1 2019 2020 2021 2019 2020 2021 Source: IRI/MSAi InfoScan Cigarette 2021 – Blended, WE 01/02/22 28 | For Investor Presentation ONLY | CAGNY 2022 | 2.22.2022
Slide 29: FY 2021: Oral Tobacco Products Segment
FY 2021: Oral Tobacco Products Segment Adjusted OCI* Adjusted OCI Margins* $1.7 billion 68.5% Copenhagen continues to be the leading oral tobacco brand *For reconciliations of non-GAAP to GAAP measures visit altria.com. 29 | For Investor Presentation ONLY | CAGNY 2022 | 2.22.2022
Slide 30: Strong Balance Sheet
Strong Balance Sheet Debt-to-EBITDA* 2.8x 2.3x 3/31/2019 12/31/2021 *For reconciliations of non-GAAP to GAAP measures visit altria.com. All-third party trademarks remain the property of their respective owners. 30 | For Investor Presentation ONLY | CAGNY 2022 | 2.22.2022
Slide 31: Cash Returns to Shareholders
Cash Returns to Shareholders We returned $8.1 billion in cash to shareholders through dividends and share repurchases in 2021 Cash Returned to Shareholders Annualized Dividend Growth +8.1% $36 B CAGR Share Repurchases $7 B $3.60 $3.36 $3.44 $3.20 $2.64 $2.44 Dividends $29 B 2017 - 2021 2016 2017 201
Slide 32: 2022 Financial Guidance
2022 Financial Guidance We reaffirm our full-year 2022 adjusted diluted earnings per share* (EPS) guidance of $4.79 to $4.93. This range represents an adjusted diluted EPS growth rate of 4% to 7% from a 2021 base of $4.61. We expect 2022 EPS growth to be weighted toward the second half of the year.
Slide 33: Additional ESG Progress
Additional ESG Progress Environmental Governance ▪ We recently committed to a long-term ▪ We continue to make progress toward our renewable electricity purchase agreement that Inclusion and Diversity aiming points, including we expect to be operational by the end of the our goal that employees of co
Slide 34: We Believe We are Best Positioned to Lead the Tobacco Harm Reduction Opportunity
We Believe We are Best Positioned to Lead the Tobacco Harm Reduction Opportunity We have: • a demonstrated commitment to responsibility • a robust understanding of tobacco consumers and the U.S. tobacco market • long-standing relationships with retailers and wholesalers • a broad portfolio of produc
Slide 35: Company Name | Owner Name | Date | Status | Confidentiality
Company Name | Owner Name | Date | Status | Confidentiality