Slide 1: Altria's Third-Quarter 2021 Earnings Conference Call
Altria’s Third-Quarter 2021 Earnings Conference Call October 28, 2021 1 | ALCS | Q3 2021 | 10.28.21 | 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 | Q3 2021 | 10.28.21 | For Investor Purposes ONLY | Final
Slide 4: Q3 2021: Adjusted Diluted Earnings Per Share
Q3 2021: Adjusted Diluted Earnings Per Share* +2.5% +4.5% $3.52 $3.37 $1.19 $1.22 Q3 2020 Q3 2021 Nine Months Ended Nine Months Ended Sept. 30, 2020 Sept. 30, 2021 *For reconciliations of non-GAAP to GAAP measures visit altria.com. 4 | ALCS | Q3 2021 | 10.28.21 | For Investor Purposes ONLY | Final
Slide 5: Smokeable Products Segment
Smokeable Products Segment Adjusted Operating Companies Income* (OCI) Adjusted OCI Adjusted OCI ($ in millions) ($ in millions) (2.2%) +2.6% $7,723 $7,920 $2,823 $2,761 Q3 2020 Q3 2021 Nine Months Ended Nine Months Ended Sept. 30, 2020 Sept. 30, 2021 *For reconciliations of non-GAAP to GAAP measures
Slide 6: Oral Tobacco Products Segment
Oral Tobacco Products Segment 6 | ALCS | Q3 2021 | 10.28.21 | For Investor Purposes ONLY | Final
Slide 7: on! Performance
on! Performance Share of Oral Tobacco Category (total U.S.) 3.0 2.0 1.7 1.1 Q4 '20 Q1 '21 Q2 '21 Q3 '21 Source: IRI InfoScan Oral Tobacco MOC, WE 10/03/2021 7 | ALCS | Q3 2021 | 10.28.21 | For Investor Purposes ONLY | Final
Slide 8: Oral Nicotine Products Regulatory Update
Oral Nicotine Products Regulatory Update XXXXXXXXXXXXXXX XXXXXXXXXXXXXXX 8 | ALCS | Q3 2021 | 10.28.21 | For Investor Purposes ONLY | Final
Slide 9: E-Vapor Category Volume
E-Vapor Category Volume Estimated Equivalized Volume (in billions of units) Quarterly Estimates Q3 2021 Category ∆ 0.7 2% Q/Q Increase 17% YOY Increase 0.51 0.52 0.49 0.50 0.50 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 Q3 '21 Source: AVI
Slide 10: 2021 National Youth Tobacco Survey Results
2021 National Youth Tobacco Survey Results Current E-Cigarette Use Among High School Students, 2011-2021* Current E-Cigarette Use Usual Brand Used Among High School 35 Among High School Students 35 E-Cigarette Users, 2021 27.5 26.1 20.8 Percentage (%) Percentage (%) 19.6 16.0 13.4 11.3 11.7 10.8 9.6
Slide 11: IQOS Performance
IQOS Performance IQOS Volume IQOS Device Penetration % GA, NC, SC & VA ATL CLT NoVA Q4 '20 Q1 '21 Q2 '21 Q3 '21 0 2 4 6 8 10 12 14 16 18 20 22 24 Weeks In the last four weeks of Q3, Marlboro HeatSticks achieved a cigarette category retail share of 1.8% in Northern Virginia stores with distribution.
Slide 12: International Trade Commission (ITC) Update
International Trade Commission (ITC) Update • On September 29, 2021, the ITC imposed an importation ban and issued cease- and-desist orders (CDO) on IQOS, Marlboro HeatSticks and infringing components. • We’re disappointed in the decision, as the IQOS heated tobacco system is the only inhalable toba
Slide 13: Key Learnings from IQOS Commercialization
Key Learnings from IQOS Commercialization 13 | ALCS | Q3 2021 | 10.28.21 | For Investor Purposes ONLY | Final
Slide 14: 2021 Adjusted Diluted EPS Guidance
2021 Adjusted Diluted EPS* Guidance We are raising the lower-end of our full-year 2021 guidance and now expect to deliver adjusted diluted EPS in a range of $4.58 to $4.62. This range represents a growth rate of 5% to 6% from a $4.36 base in 2020. *For reconciliations of non-GAAP to GAAP measures vi
Slide 15: Macroeconomic Influences on Adult Tobacco Consumers
Macroeconomic Influences on Adult Tobacco Consumers Personal Disposable Income Consumer Mobility 20% % Change vs. YAGO Time Outside Home Index, Weekly 15% 0 13% 7% 4% 2% -1% -5% -10% -100 Q1 '20 Q2 '20 Q3 '20 Q4' 20 Q1 '21 Q2 '21 Q3 '21 Apr-20 Oct-20 Apr-21 Oct-21 Dec-20 Aug-20 Aug-21 Jun-20 Jun-21
Slide 16: 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 - - Source: Databricks POS Scan WE 10/02/2021 as of 10/12/2021 1 Store reporting Volume Sales for Cigs, Marlboro & AOM f or all weeks 2020, 2021 (Stores Sample ~54K) 16 | ALCS | Q3
Slide 17: Smokeable Products Segment: Adjusted OCI Margins
Smokeable Products Segment Adjusted OCI Margins* Adjusted OCI Margins Adjusted OCI Margins +0.5pp +1.1pp 57.5% 58.0% 56.9% 58.0% Q3 2020 Q3 2021 Nine Months Ended Nine Months Ended Sept. 30, 2020 Sept. 30, 2021 *For reconciliations of non-GAAP to GAAP measures visit altria.com. 17 | ALCS | Q3 2021 |
Slide 18: Segment Cigarette Volume Reported to Adjusted Bridge
Smokeable Products Segment Segment Cigarette Volume Reported to Adjusted Bridge Q3 2021 Reported Volume Trade Inventory Movement Adjusted Volume ~5.9% (7.0%) (12.9%) Source: AVI SCMI estimates – adjusted estimates rounded to nearest 0.5% Note: Estimates are subject to revision due to wholesaler resu
Slide 19: Adjusted Cigarette Decline Rates
Adjusted Cigarette Decline Rates Smokeable Segment Total Industry Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 '20 '20 '20 '20 '21 '21 '21 '20 '20 '20 '20 '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)% YTD 2021 = YTD 2021 = (6.5)% (5.0)% (7.0)% (5.0)% Source: A
Slide 20: Marlboro Retail Share
Smokeable Products Segment Marlboro Retail Share 43.2 43.1 43.1 43.2 43.2 ∆ vs. +0.1 +0.2 +0.4 +0.5 - YAGO Q3 '20 Q4 '20 Q1 '21 Q2 '21 Q3 '21 Source: IRI/MSAi InfoScan Cigarette 2021 – Blended, WE 10/03/21 20 | ALCS | Q3 2021 | 10.28.21 | For Investor Purposes ONLY | Final
Slide 21: 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 25.3 15.3 15.0 14.8 14.9 14.7 14.8 14.9 9.9 9.9 9.8 10.2 10.4 10.3 10.5 0.0 Q1 '20 Q2 '20 Q3 '20 Q4 '20 Q1 '21 Q2 '21 Q3 '21 Source: IRI/MSAi InfoScan Cigarette 2021 – Blended,
Slide 22: John Middleton Cigars
John Middleton Cigars 22 | ALCS | Q3 2021 | 10.28.21 | For Investor Purposes ONLY | Final
Slide 23: Oral Tobacco Products Segment
Oral Tobacco Products Segment Adjusted* OCI Adjusted* OCI Margins ($ in millions) (0.5%) (2.1pp) 72.8% $1,312 70.7% $1,306 Nine Months Ended Nine Months Ended Nine Months Ended Nine Months Ended Sept. 30, 2020 Sept. 30, 2021 Sept. 30, 2020 Sept. 30, 2021 *For reconciliations of non-GAAP to GAAP meas
Slide 24: Oral Tobacco Products Segment Retail Share
Oral Tobacco Products Segment Retail Share MST + Snus on! 50.0 1.1 49.1 1.1 48.1 47.8 47.8 1.7 2.0 3.0 48.9 48.0 46.4 45.8 44.8 Q3 '20 Q4 '20 Q1 '21 Q2 '21 Q3 '21 Source: IRI/MSAi InfoScan Oral Tobacco 2021 – MOC, WE 10/03/21 24 | ALCS | Q3 2021 | 10.28.21 | For Investor Purposes ONLY | Final
Slide 25: Looking Ahead
Looking Ahead 25 | ALCS | Q3 2021 | 10.28.21 | For Investor Purposes ONLY | Final
Slide 26: ABI Investment
ABI Investment Since 2003, our beer investment has: ABI Stock Performance* Jan. 1, 2019 – Oct. 25, 2021 Served as a diverse income € 100 stream that contributed over Oct. 31, 2019 €72.04 $12 billion of adjusted equity € 75 Sept. 30, 2021 earnings; €49.15 contributed over $10 billion of € 50 cash
Slide 27: Framework for Strategic Review of ABI Investment
Framework for Strategic Review of ABI Investment Regarding the decisions around the lock-up, we view our ABI stake as a financial investment and our goal is to maximize the long-term value of the investment for shareholders. We consider several factors as we analyze the investment, including: the
Slide 28: Results of Strategic Review of ABI Investment
Results of Strategic Review of ABI Investment We have determined that selling our ABI investment at this time would not maximize long-term shareholder value. Therefore, we currently plan to maintain our ABI investment. We continue to have confidence in ABI’s: long-term strategies; premium global
Slide 29: Shareholder Value Creation
Shareholder Value Creation Paying $1.6 billion in dividends in the third quarter Raising the dividend for the 56th time in the past 52 years Dividends We maintain our long-term objective of a dividend target payout ratio of approximately 80% of adjusted diluted EPS M&A Selling Ste. Michelle
Slide 30: Moving beyond smoking
Moving beyond smoking’