Altria Group, Inc. · NYSE:MO
Altria — Investor Day (March 2023)
28 slides from Altria's investor day presentation, Mar 23, 2023
Slide 1: Sal Mancuso, Chief Financial Officer
Sal Mancuso Chief Financial Officer
Slide 2: Impressive Smokeable Performance
Impressive Smokeable Performance Adjusted OCI* ($ in billions) +4.7% CAGR $10.4 $10.7 $10.1 $9.2 $8.5 $8.4 2017 2018** 2019 2020 2021 2022 Adjusted 51.0% 50.6% 54.5% 56.4% 57.6% 59.0% OCI Margins* *For reconciliations of non-GAAP to GAAP measures visit altria.com. **2018 reduction in adjusted OCI du
Slide 3: Cigarette Category Dynamics
Cigarette Category Dynamics Adult Smoker Prevalence (Past 30-Day, 12 Month Moving) 20% We have studied the Secular decline rate of U.S. cigarette category ~2.5% is still relevant for decades Cigarette prevalence New estimate of the and age demographic national price elasticity coefficient of -0.35,
Slide 4: Industry Discount Segment Retail Share
Industry Discount Segment Retail Share Branded Discount Deep Discount 26.9 25.1 25.5 15.2 15.0 14.8 10.1 10.7 11.7 FY 2020 FY 2021 FY 2022 Source: IRI/MSAi InfoScan – Blended, WE 1/1/2023 4 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 5: Marlboro Leadership in the Premium Segment
Marlboro Leadership in the Premium Segment Share of Premium (FY 2022) 58.2 16.2 10.6 6.6 4.4 Marlboro Newport Camel Natural American Spirit Winston, Kool & Salem Premium Share Δ +1.0 (0.9) (0.7) +0.6 - Since FY 2019 Source: IRI/MSAi InfoScan – Blended, WE 1/1/2023 5 | For Investor Purposes ONLY | In
Slide 6: 2028 Enterprise Goal
2028 Enterprise Goal 2028 Enterprise Goals Corporate U.S. Smoke-Free Products Long-Term Growth Financial International Share of Policy & Total Adjusted U.S. Smoke- U.S. Smoke- Innovative Non-Nicotine U.S. Tobacco Capital OCI Margin Free Volume Free Revenue Smoke-Free Revenue Space Allocation Revenue
Slide 7: Strong Earnings Growth & Cash Returns to Shareholders
Strong Earnings Growth & Cash Returns to Shareholders Adjusted Diluted Earnings Per Share (EPS)* Cash Returns to Shareholders ($ in billions) +4.9% CAGR $4.84 $8.4 $8.1 $3.99 $7.1 $1.8 Share $6.9 $1.7 Repurchases $6.3 $1.7 $0.8 $6.1 $6.3 $6.4 $6.6 Dividends $5.4 FY 2018 FY 2022 2018 2019 2020 2021 2
Slide 8: Committed to Long-Term Shareholder Value
Committed to Long-Term Shareholder Value 2028 Enterprise Goals Corporate U.S. Smoke-Free Products Long-Term Growth Financial International Share of Policy & Total Adjusted U.S. Smoke- U.S. Smoke- Innovative Non-Nicotine U.S. Tobacco Capital OCI Margin Free Volume Free Revenue Smoke-Free Revenue Spac
Slide 9: 2028 Enterprise Goals
2028 Enterprise Goals 2028 Enterprise Goals Corporate U.S. Smoke-Free Products Long-Term Growth Financial International Share of Policy & Total Adjusted U.S. Smoke- U.S. Smoke- Innovative Non-Nicotine U.S. Tobacco Capital OCI Margin Free Volume Free Revenue Smoke-Free Revenue Space Allocation Revenu
Slide 10: History of Strong & Growing Dividends
History of Strong & Growing Dividends Our Dividend Remains the Primary Vehicle for Returning Cash to Shareholders Annualized Dividend Per Share1 +4.1% CAGR $3.76 $3.60 $3.36 $3.44 $3.20 2018 2019 2020 2021 2022 1 Annualized dividend per share calculated using annualized quarterly dividend per share
Slide 11: 2028 Enterprise Goal
2028 Enterprise Goal 2028 Enterprise Goals Corporate U.S. Smoke-Free Products Long-Term Growth Financial International Share of Policy & Total Adjusted U.S. Smoke- U.S. Smoke- Innovative Non-Nicotine U.S. Tobacco Capital OCI Margin Free Volume Free Revenue Smoke-Free Revenue Space Allocation Revenue
Slide 12: Balanced Approach to Deploying Excess Cash
Balanced Approach to Deploying Excess Cash Produced ~$1 billion of cash annually in excess of our divided payments We will continue to balance: Share Investments in Debt Repurchases our Vision Repayment 12 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 13: NJOY Transaction
NJOY Transaction Multiple sources of available funding, including (i) our significant cash NJOY Transaction generation, (ii) strong access to the credit markets, (iii) committed short-term Funding bank financing and (iv) expected payment of $1.7 billion, plus interest, from Philip Morris Internation
Slide 14: Our Balance Sheet Remains Strong
Our Balance Sheet Remains Strong Annual Debt Maturity Towers (Through 2038, $ in billions) $1.9 $1.8 $1.6 $1.6 $1.3 $1.1 $1.1 $0.8 $0.2 $0.2 - - - - - - 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 As of year-end 2022, our Debt-to-EBITDA ratio was 2.1x. Face value
Slide 15: 2028 Enterprise Goal
2028 Enterprise Goal 2028 Enterprise Goals Corporate U.S. Smoke-Free Products Long-Term Growth Financial International Share of Policy & Total Adjusted U.S. Smoke- U.S. Smoke- Innovative Non-Nicotine U.S. Tobacco Capital OCI Margin Free Volume Free Revenue Smoke-Free Revenue Space Allocation Revenue
Slide 16: Tax Update – JUUL Tax Losses
Tax Update – JUUL Tax Losses • Turning to the tax impacts of our former JUUL stake, we estimate that we have more than $12.5 billion in losses. • For cash tax purposes, we plan to claim approximately $6.4 billion in ordinary losses this year. However, we do not expect this position will have an impa
Slide 17: ABI Investment
ABI Investment All third-party trademarks remain the property of their respective owners. 17 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 18: Olivier Houpert, Chief Innovation & Product Officer
Olivier Houpert Chief Innovation & Product Officer
Slide 19: Holistic Approach to Product Development
Holistic Approach to Product Development Consumer Product Usage Lifestyles and Requirements Occasions Behaviors Barriers and Regulatory Commercial Motivators Requirements Success 19 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 20: Connect & Transform Open Innovation to Support Altria's Existing Capabilities
Connect & Transform Open Innovation to Support Altria’s Existing Capabilities Subject Matter Expertise New Technologies Disruptive Innovations 20 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 21: Non-Nicotine Adjacency Opportunity
Non-Nicotine Adjacency Opportunity We believe we can create incremental value through non-nicotine adjacency strategies. 21 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 22: International Nicotine Opportunity
International Nicotine Opportunity 22 | For Investor Purposes ONLY | Investor Day 2023 | 3.23.2023
Slide 23: 2028 Enterprise Goals Non-Nicotine
2028 Enterprise Goals 2028 Enterprise Goals Corporate U.S. Smoke-Free Products Long-Term Growth Financial International Share of Policy & Total Adjusted U.S. Smoke- U.S. Smoke- Innovative Non-Nicotine U.S. Tobacco Capital OCI Margin Free Volume Free Revenue Smoke-Free Revenue Space Allocation Revenu
Slide 24: Billy Gifford, Chief Executive Officer
Billy Gifford Chief Executive Officer
Slide 25: 2028 Enterprise Goals
2028 Enterprise Goals Corporate Smoke-Free Products Long-Term Growth International Financial Policy Share of U.S. Total Adjusted U.S. Smoke-Free U.S. Smoke-Free Innovative Non-Nicotine & Capital Tobacco Space OCI Margin Volume Revenue Smoke-Free Revenue Allocation Revenue EPS Growth Mid-Single Digit
Slide 26: 26 | For Investor Presentation ONLY | Investor Day 2023 | 3.23.2023
26 | For Investor Presentation ONLY | Investor Day 2023 | 3.23.2023 All new products subject to FDA approval.
Slide 27: 27 | For Investor Presentation ONLY | Investor Day 2023 | 3.23.2023
27 | For Investor Presentation ONLY | Investor Day 2023 | 3.23.2023 All new products subject to FDA approval.
Slide 28: Slide 28