Altria Group, Inc. · NYSE:MO
Altria — Q1 2021 Earnings Presentation
29 slides from Altria's earnings presentation, Apr 29, 2021
Slide 1: Altria's First-Quarter 2021 Earnings Conference Call
Altria’s First-Quarter 2021 Earnings Conference Call April 29, 2021 1 | ALCS | Q1 2021 | 4.29.21 | 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 Start to the Year and Continuing to Make Progress Towards Achieving our Vision
Strong Start to the Year and Continuing to Make Progress Towards Achieving our Vision On track to deliver against full-year plans Tobacco businesses performed well We continue to make progress advancing our non-combustible product portfolio Acquired remaining 20% of the global on! business R
Slide 4: Q1 2021: Adjusted Diluted Earnings Per Share
Q1 2020: Adjusted Diluted Earnings Per Share* Adjusted Diluted EPS (1.8%) $1.09 $1.07 2020 2021 *For reconciliations of non-GAAP to GAAP measures visit altria.com. 4 | ALCS | Q1 2021 | 4.29.21 | For Investor Purposes ONLY
Slide 5: Marlboro Continued to Lead the Cigarette Category
Marlboro Continued to Lead the Cigarette Category Smokeable Strategy Maximize profitability in combustibles, while appropriately balancing investments in Marlboro with funding the growth of non-combustible products. 5 | ALCS | Q1 2021 | 4.29.21 | For Investor Purposes ONLY
Slide 6: Q1 2021: Smokeable Products Segment
Q1 2021: Smokeable Products Segment Segment Cigarette Volume Reported to Adjusted Bridge Reported Shipment Trade Inventory Calendar Adjusted Volume Movement Differences Other Smokeable Volume ~1.0% ~1.5% (3.5%) ~6.0% (12.0%) Source: AVI SCMI estimates – rounded to nearest 0.5% Note: Estimates are su
Slide 7: Adjusted Cigarette Industry Volume Decline Rate Estimates
Adjusted Cigarette Industry Volume Decline Rate Estimates Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 1.0% 0.5 % 0% (2.0)% (2.0)% Source: AVI SCMI estimates – rounded to nearest 0.5% Note: Estimates are subject to revision due to wholesaler resubmission of inventory data 7 | ALCS | Q1 2021 | 4.29.21 | F
Slide 8: 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 - - 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 Databricks POS Scan week ending 03/26/2021 as of 04/12/2021 1 Store reporting volume
Slide 9: Full Global Ownership of on! Oral Nicotine Pouches
Full Global Ownership of on! Oral Nicotine Pouches Completed transactions to acquire the remaining 20% of the global on! business for ~$250 million Q1 2021 retail share for oral nicotine pouches doubled to ~13% versus a year ago We estimate oral nicotine pouch category volume in the U.S. to gr
Slide 10: Significant on! Progress Since 2019
Significant on! Progress Since 2019 Retail Store Count (in thousands) 93 Since 2019, Helix and the enterprise: 78 increased on! manufacturing capacity broadened retail distribution ~6% 60 grew tobacco consumer awareness filed PMTAs for the entire product 40 portfolio 26 achieved annualized
Slide 11: on! Retail Share Increasing
on! Retail Share Increasing Share of Oral Tobacco Category Share of Oral Tobacco Category (total U.S.) (in stores with distribution) 3.1 1.7 2.4 1.1 Q4' 20 Q1 '21 Q4 '20 Q1 '21 12MM 12MM By mid year 2021, Helix expects on! to be in stores covering 90% of oral tobacco volumes. Helix expects to report
Slide 12: on! Global Opportunity
on! Global Opportunity Primary focus continues to be increasing on!’s growth in the U.S. Opportunities to strengthen on! in the Swedish market ~6% Longer-term prospects in Europe to expand on! and gain consumer feedback ~12% on potential non-combustible products for the U.S. 12 | ALCS | Q1 202
Slide 13: E-Vapor Category Volume
E-Vapor Category Volume Estimated Equivalized Volume (in billions of units) Q1 2021 Category ∆ Quarterly Estimates Balance JUUL 7% Q/Q Increase 24% YOY Increase 0.6 0.49 0.50 0.49 0.45 0.46 0.44 0.46 0.44 0.40 0.0 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 JUUL’s estimated market share of
Slide 14: Marlboro HeatSticks Retail Share
Marlboro HeatSticks Retail Share Cigarettes and Heated Tobacco Atlanta Charlotte (in stores with distribution) (in stores with distribution) 1.1 1.0 0.9 0.7 Q4 '20 Q1 '21 Q4 '20 Q1 '21 Source: GMR Sales Extract through 04/03/2021, POS Scan through 04/03/2021. STARS through 04/04/2021 14 | ALCS | Q1
Slide 15: IQOS Introduced in Markets
IQOS 3 Introduced in Markets All-third party trademarks remain the property of their respective owners. 15 | ALCS | Q1 2021 | 4.29.21 | For Investor Purposes ONLY
Slide 16: Digital Platforms Driving IQOS Awareness and Trial
Digital Platforms Driving IQOS Awareness and Trial We are using Marlboro.com and getIQOS.com to engage with adult smokers and communicate IQOS benefits, including its MRTP claim on the IQOS 2.4 system IQOS content is available nationwide on Marlboro.com Adult smokers can sign up to receive com
Slide 17: IQOS Expansion Plans on Track
IQOS Expansion Plans on Track In June, PM USA plans to open an IQOS boutique in Tysons Corner Mall in the highly populated Northern Virginia metro market outside of Washington D.C. PM USA plans to expand: IQOS to three additional metro markets in 2021 availability of Marlboro HeatSticks in g
Slide 18: 2021 Adjusted Diluted EPS Guidance
2021 Adjusted Diluted EPS Guidance We reaffirm our full-year 2021 adjusted diluted EPS* guidance of $4.49 to $4.62. This range represents a growth rate of 3% to 6% from a 2020 adjusted diluted base of $4.36. Our 2021 plans include investments in support of our Vision to transition smokers to a non
Slide 19: Employees Continue to Drive the Success of Our Businesses
Employees Continue to Drive the Success of Our Businesses 19 | ALCS | Q1 2021 | 4.29.21 | For Investor Purposes ONLY
Slide 20: Smokeable Products Segment Results
Smokeable Products Segment Results Adjusted OCI* and OCI Margins* Adjusted OCI ($ in millions) Adjusted OCI Margins (0.7%) +2.2pp $2,392 $2,375 57.5% 55.3% Q1 2020 Q1 2021 Q1 2020 Q1 2021 *For reconciliations of non-GAAP to GAAP measures visit altria.com. 20 | ALCS | Q1 2021 | 4.29.21 | For Investor
Slide 21: Smokeable Products Segment: Marlboro Retail Share
Smokeable Products Segment Marlboro Retail Share 43.2 43.1 43.1 42.7 42.7 ∆ vs. (0.4) (0.5) +0.1 +0.2 +0.4 YAGO Q1 '20 Q2 '20 Q3 '20 Q4 '20 Q1 '21 Source: IRI/MSAi InfoScan Cigarette 2021 – Blended, week ending 04/04/21 21 | ALCS | Q1 2021 | 4.29.21 | For Investor Purposes ONLY
Slide 22: Discount Segment Retail Share
Discount Segment Retail Share Total Discount Segment (%) Deep Discount Branded Discount 25.2 25.3 15.3 14.9 9.9 10.4 Q1 '20 Q1 21 Source: IRI/MSAi InfoScan Cigarette 2021 – Blended, week ending 04/04/21 22 | ALCS | Q1 2021 | 4.29.21 | For Investor Purposes ONLY
Slide 23: John Middleton Cigars
John Middleton Cigars 23 | ALCS | Q1 2021 | 4.29.21 | For Investor Purposes ONLY
Slide 24: Oral Tobacco Products Segment Results
Oral Tobacco Products Segment Results Adjusted OCI* and OCI Margins* Adjusted OCI ($ in millions) Adjusted OCI Margins +3.1% (0.9pp) $429 73.0% $416 72.1% Q1 2020 Q1 2021 Q1 2020 Q1 2021 *For reconciliations of non-GAAP to GAAP measures visit altria.com. 24 | ALCS | Q1 2021 | 4.29.21 | For Investor
Slide 25: Oral Tobacco Products Segment Retail Share
Oral Tobacco Products Segment Retail Share (2.3pp) 50.4 48.1 Q1 '20 Q1 '21 Source: IRI/MSAi InfoScan Oral Tobacco 2021 – MOC, week ending 04/04/21 25 | ALCS | Q1 2021 | 4.29.21 | For Investor Purposes ONLY
Slide 26: Our Alcohol Assets
Our Alcohol Assets All-third party trademarks remain the property of their respective owners. 26 | ALCS | Q1 2021 | 4.29.21 | For Investor Purposes ONLY
Slide 27: Altria Joins the Coalition for Cannabis Policy, Education, and Regulation
Altria Joins the Coalition for Cannabis Policy, Education, and Regulation We continue to support our investment in Cronos by advocating for a federally legal, regulated and responsible U.S. cannabis market. All-third party trademarks remain the property of their respective owners. 27 | ALCS | Q1 202
Slide 28: Capital Allocation
Capital Allocation In the first quarter we paid $1.6 billion in dividends Dividends We maintain our long-term objective of a dividend target payout ratio of approximately 80% of adjusted diluted EPS Repurchased 6.9 million shares totaling $325 million in the first quarter Share $1.7 billion
Slide 29: Moving beyond smoking Altria
Moving beyond smoking 7 Altria