Slide 1: CAGNY 2024
CAGNY 2024 1
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
Moweinic beyond oa | Altria
Slide 4: Agenda
Agenda • Capturing the growing harm reduction opportunity in the U.S.; • Maintaining the strength of our highly profitable core tobacco businesses; • Using our existing capabilities to expand beyond U.S. nicotine; and • Continuing our commitment to create substantial value for shareholders. 4 | ALCS
Slide 5: Deep Understanding of U.S. Adult Tobacco Consumers
Deep Understanding of U.S. Adult Tobacco Consumers (ATCs) ATC Data Gathered in 2023 Research ~4 Billion ATC Millions of With ~50,000 ATCs Transactions at Retail ATC Engagements With Our Brands Source: ALCS CMII, CXO and D&T Estimates 5 | ALCS | CAGNY | 2.21.24 | For Investor Purposes ONLY
Slide 6: Adult Smoker Transition is Accelerating
Adult Smoker Transition is Accelerating Total ATCs (Twelve Months Ended, Millions of ATCs) Combustible Only Combustible & Smoke-Free Smoke-Free Only 51 52 ~15% 8 15 ~30% 8 8 35 29 2018 2023 Source: ATCT January 2018 to December 2023 6 | ALCS | CAGNY | 2.21.24 | For Investor Purposes ONLY
Slide 7: The U.S. Nicotine Space Has Remained Stable
The U.S. Nicotine Space Has Remained Stable Nicotine Space Estimated Volume (Volume in Billions of Equivalized Cigarette Packs) Combustible Oral Tobacco E-Vapor +1.0% CAGR 16.8 16.6 15.8 15.5 16.0 16.1 2018 2019 2020 2021 2022 2023 Source: ALCS CMII Estimates; ATCT; STARS; Circana; ALCS Consumer Res
Slide 8: Achieving a Smoke-Free Future Requires Three Critical Elements
Achieving a Smoke-Free Future Requires Three Critical Elements A variety of smoke-free The entire industry Underage tobacco use products authorized by the operating within science- continuing to decline. U.S. Food and Drug based regulation. Administration (FDA). 8 | ALCS | CAGNY | 2.21.24 | For Inve
Slide 9: 2024 Marks the 15th Anniversary of FDA Regulation
2024 Marks the 15th Anniversary of FDA Regulation • We supported FDA regulation because we believed science-based regulation would benefit tobacco consumers. • While we still believe federal regulation is critical, we have a long way to go to realize its potential. All third-party trademarks remain
Slide 10: Harm Reduction is About Smokers
Harm Reduction is About Smokers Consumers are Only 45 products have misinformed about the 82% of U.S. adults received FDA authorization health risks associated incorrectly believe that out of more than 25 million with different tobacco nicotine is a carcinogen. applications. products. Source: ALCS N
Slide 11: State Directory Bills and Early Progress
State Directory Bills and Early Progress States With Enacted or Pending Directory Bills Louisiana E-Vapor Shipment Volume Example (Units in Thousands) Directory Products (LHS) Illicit Disposable (RHS) ME WA NH 400 50 MT ND NY VT Effective Date Certification Due Date MN OR ID *WI MI SD MA PA WY IA NE
Slide 12: Our Smoke-Free Portfolio and Pipeline
Our Smoke-Free Portfolio and Pipeline E-Vapor Oral Tobacco Heated Tobacco New Internally Developed HTC Product All new products subject to FDA authorization. All third-party trademarks remain the property of their respective owners. 12 | ALCS | CAGNY | 2.21.24 | For Investor Purposes ONLY
Slide 13: E-Vapor is the Largest Smoke-Free Category
E-Vapor is the Largest Smoke-Free Category E-Vapor Oral Tobacco Heated Tobacco New Internally Developed HTC Product All new products subject to FDA authorization. All third-party trademarks remain the property of their respective owners. 13 | ALCS | CAGNY | 2.21.24 | For Investor Purposes ONLY
Slide 14: E-Vapor Appeals to a Wide Range of Adult Smokers and Vapers
E-Vapor Appeals to a Wide Range of Adult Smokers and Vapers Adult Vapers Past 30-Day Usage Demographic Comparison (Twelve Months Ended, in Millions) Smokers Smokers Age Vapers Vapers 21-29 30+ 17.0 Smokers Smokers Income 13.7 <50K 50K+ Vapers Vapers 11.9 Smokers Smokers Region 9.5 Urban Rural Vapers
Slide 15: Illicit Products Driving E-Vapor Category Growth
Illicit Products Driving E-Vapor Category Growth E-Vapor Category Volume (Volume in Billions of Equivalized Cigarette Packs) • We estimate illicit flavored disposable products +35% represented over 50% of the category in 2023. ~4.5 • We estimate pod-based volumes declined by 15% in ~3.5 2023 and rep
Slide 16: Over Half of Adult Vapers Use Disposable Products
Over Half of Adult Vapers Use Disposable Products Adult Disposable Vapers (Twelve Months Ended, in Millions) +60% ~9.5 ~6.0 2022 2023 Source: ATCT December 2022 to December 2023. Rounded to the nearest 0.5. All third-party trademarks remain the property of their respective owners. 16 | ALCS | CAGNY
Slide 17: Flavored Disposable Products are Contributing to Youth Usage
Flavored Disposable Products are Contributing to Youth Usage 2023 National Youth Tobacco Survey Device Type Used Most Often Usual Brand Used (Among Middle & High School Current E-Cigarette Users) (Among Middle & High School Current E-Cigarette Users) 60.7% 31.1% 16.1% 17.3% 8.7% 5.9% 6.0% 3.4% Dispo
Slide 18: NJOY 2023 Foundational Actions
NJOY 2023 Foundational Actions Cumulative Stores with Distribution • Strengthened NJOY’s supply chain (in Thousands) • Closed inventory gaps at retail and improved in-stock 75 conditions • Enhanced visibility at retail and introduced NJOY’s first retail trade program 35 Q2 '23 Q4 '23 Source: STARS w
Slide 19: NJOY Encouraging Initial Trial Performance
NJOY Encouraging Initial Trial Performance NJOY Trial Performance NJOY Share (One Retail Account Example) (Total U.S.) Pre-Trial During Trial NJOY Bundle Offer Tests 4.0 3.7 +9pp 3.3 3.4 Jul-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Sept-23 Oct-23 Nov-23 Dec-23 Source: Circana Non-Projected MOC w
Slide 20: NJOY 2024 Plans for Further Distribution, Awareness and Trial
NJOY 2024 Plans for Further Distribution, Awareness and Trial Cumulative Stores with Distribution (in Thousands) +33% 100 75 2023 2024* *We plan to expand NJOY distribution to ~100K stores this year, representing ~85% of e-vapor volume and ~70% of cigarette volume sold in traditional retail. Source:
Slide 21: 21 | ALCS | CAGNY | 2.21.24 | For Investor Purposes ONLY
21 | ALCS | CAGNY | 2.21.24 | For Investor Purposes ONLY
Slide 22: NJOY's Premium Quality and Unique Attributes
NJOY’s Premium Quality and Unique Attributes 22 | ALCS | CAGNY | 2.21.24 | For Investor Purposes ONLY
Slide 23: NJOY ACE Menthol PMTAs
NJOY ACE Menthol PMTAs Many HPHCs* are Absent or Substantially Reduced *HPHC = harmful and potentially harmful constituents; NNK = 4-(methylnitrosamino)-1-(3-pyridyl)-1-butanone; NNN = N-nitrosonornicotine. Percent reductions based on average HPHC levels in 5% Menthol NJOY ACE product compared to ci
Slide 24: NJOY ACE Menthol PMTAs
NJOY ACE Menthol PMTAs Compelling Switching Data and Low Youth Usage Adult Smoker Switching* (% Switched, Reported No Smoking in Past 30-days) 24.2% The scientific evidence we submitted in our PMTAs also 16.8% demonstrated that youth use of ACE Menthol was either not detectible or exceedingly low. M
Slide 25: NJOY Bluetooth PMTAs
NJOY Bluetooth PMTAs Adult Smoker Switching* (% Switched, Reported No Smoking in Past 30-days) 29.0% 26.3% Our research shows the NJOY 16.8% Bluetooth age-gating restrictions are effective at preventing underage access in virtually all cases. Blueberry Watermelon Classic Tobacco *Switching rate was
Slide 26: NJOY Litigation
NJOY Litigation • JUUL Labs, Inc. (JUUL) has asserted patent infringement claims against NJOY, and conversely, NJOY has asserted claims against JUUL. • We do not expect any final decisions before 2025. • We continue to believe in the strength of our claims, and that we have strong defenses against J
Slide 27: Strong Oral Tobacco Products Segment Performance
Strong Oral Tobacco Products Segment Performance Adjusted Operating Companies Income* (OCI) and Adjusted OCI Margins* Adjusted OCI Adjusted OCI Margins ($ in Millions) +5.5% +1.1pp $1,722 $1,632 66.3% 67.4% 2022 2023 2022 2023 *For reconciliations of non-GAAP to GAAP measures visit altria.com. 27 |
Slide 28: The U.S. Oral Tobacco Industry Continues to Grow
The U.S. Oral Tobacco Industry Continues to Grow Oral Tobacco Industry Volume Growth Adult Oral Tobacco Product Consumers (Six Months Ended) (Past 30-Day Usage, Twelve Months Ended) 7.5% 6.9 5.8 1.0% 2022 2023 2022 2023 Source: ALCS CMII Estimates. Rounded to the nearest 0.5%. Oral Tobacco industry
Slide 29: Share Momentum, Volume Growth and Improved Profitability
Share Momentum, Volume Growth and Improved on! Profitability on! Share of Oral Tobacco Category (Total U.S.) +1.8pp 6.8 5.0 • ~39% increase in volume year-over-year • >37% increase in retail price year-over-year 2022 2023 Source: ALCS CMII Estimates based on Circana Projected MOC data as of week end
Slide 30: Increased on! Awareness and Brand Adoption
Increased on! Awareness and Brand Adoption Awareness of on! on! Retail Sales Volume (% Among Total ATCs 21-54) (Cans in Millions) +15% Estimated Repeat Purchase Estimated Trial 62 58 54 42 48 36 2H '22 2H '23 2H '22 2H '23 Source: 2022 – 2023 Nicotine Pouch Awareness & Perceptions Tracker Source: AL
Slide 31: Exciting on! and on! PLUS Growth Prospects
Exciting on! and on! PLUS Growth Prospects All new products subject to FDA authorization. 31 | ALCS | CAGNY | 2.21.24 | For Investor Purposes ONLY
Slide 32: Compelling Heated Tobacco Pipeline
Compelling Heated Tobacco Pipeline All new products subject to FDA authorization. All third-party trademarks remain the property of their respective owners. 32 | ALCS | CAGNY | 2.21.24 | For Investor Purposes ONLY
Slide 33: Our Partnership with JT Group
Our Partnership with JT Group All new products subject to FDA authorization. All third-party trademarks remain the property of their respective owners. 33 | ALCS | CAGNY | 2.21.24 | For Investor Purposes ONLY
Slide 34: Our Innovative Heated Tobacco Capsule Product
Our Innovative Heated Tobacco Capsule Product All new products subject to FDA authorization. 34 | ALCS | CAGNY | 2.21.24 | For Investor Purposes ONLY
Slide 35: SWIC Nicotine Satisfaction and Design
SWIC Nicotine Satisfaction and Design SWIC Versus IQOS 3.0 Duo SWIC Versus glo SWIC IQOS 3.0 Duo SWIC glo Immediate Nicotine Satisfies My Desire This Product Is Immediate Nicotine Satisfies My Desire This Product Is Satisfaction for Nicotine Easy To Use Satisfaction for Nicotine Easy To Use All thir
Slide 36: Moving beyond smoking
Moving beyond smoking
Slide 37: 37 | ALCS | CAGNY | 2.21.24 | For Investor Purposes ONLY
37 | ALCS | CAGNY | 2.21.24 | For Investor Purposes ONLY
Slide 38: Long-Term Smokeable Products Segment Performance
Long-Term Smokeable Products Segment Performance Adjusted OCI* Marlboro Share ($ in Billions) +4.9% CAGR $10.7 43.4% 42.1% $8.4 2018 2023 2018 2023 *For reconciliations of non-GAAP to GAAP measures visit altria.com. Source: Circana Projected Total U.S. MOC week ending 12/31/2023 38 | ALCS | CAGNY |
Slide 39: Marlboro Leads in the Premium Segment
Marlboro Leads in the Premium Segment Share of Premium (Full Year 2023) 58.8 15.9 10.1 6.6 4.6 Marlboro Newport Camel Winston, Kool Natural American & Salem Spirit Premium Share Δ Since FY +1.6 (1.2) (1.2) +0.1 +0.6 2020 Source: Circana Projected Total U.S. MOC week ending 12/31/2023 39 | ALCS | CAG
Slide 40: Smokeable Products Segment Margin Expansion
Smokeable Products Segment Margin Expansion Adjusted OCI Margin* +9.3pp • We have invested in foundational infrastructure that supports our smokeable segment and our growing smoke-free portfolio. 59.9% 50.6% • Our innovative spending is now better aligned to the product it supports. 2018 2023 *For r
Slide 41: Cigarette Category Volume Decomposition
Cigarette Category Volume Decomposition (8.0%) Estimated Industry Decline (1.9%) Cigarette Price Elasticity1 We estimate that illegal flavored disposable e-vapor contributed (2.5%) Secular Decline Rate2 to cigarette industry declines in a range of 1.5% to 2.5% over the last 12 months. (3.6%) Macroec
Slide 42: Moving beyond smoking
Pies Peer, Moving beyond smoking.
Slide 43: Creating Incremental Value Through Long-Term Adjacencies
Creating Incremental Value Through Long-Term Adjacencies International U.S. Incremental Smoke-Free Non-Nicotine Value 43 | ALCS | CAGNY | 2.21.24 | For Investor Purposes ONLY
Slide 44: 2028 International Innovative Smoke-Free Goal
2028 International Innovative Smoke-Free Goal 2028 Enterprise Goals Corporate U.S. Smoke-Free Products Long-Term Growth Financial Share of U.S. U.S. International Policy & Total Adjusted U.S. Tobacco Smoke-Free Smoke-Free Innovative Non-Nicotine Capital OCI Margin Space Volume Revenue Smoke-Free All
Slide 45: International Oral Tobacco Opportunity
International Oral Tobacco Opportunity • We plan to focus our near-term international efforts on the nicotine pouch category. • We estimate this category represents a $1 to $2 billion total addressable market.1 1 Excludes the U.S., Russia and China Source: AVI CDI Estimates; External Sources 45 | AL
Slide 46: on! PLUS Test Launch and Expansion Plans
on! PLUS Test Launch and Expansion Plans Our New Tobacco-Derived Nicotine Wet Pouch Product • Encouraging early results from on! PLUS test launch in Sweden. • 89% of first-time purchasers were competitive pouch consumers. • In 2024, we’re planning a broader expansion of on! PLUS in Sweden and a targ
Slide 47: International Heated Tobacco and E-Vapor Opportunities
International Heated Tobacco and E-Vapor Opportunities $35 to $50 Billion Total Addressable Market1 1 Excludes the U.S., Russia and China Source: AVI CDI Estimates; External Sources 47 | ALCS | CAGNY | 2.21.24 | For Investor Purposes ONLY
Slide 48: Non-Nicotine Adjacencies
Non-Nicotine Adjacencies Energy Focus Relax Stress Relief $100 Billion Total Addressable Market in the U.S. Source: AVI Venture Growth Estimates; Circana; External Sources 48 | ALCS | CAGNY | 2.21.24 | For Investor Purposes ONLY
Slide 49: Applying Our World-Class Capabilities to Non-Nicotine
Applying Our World-Class Capabilities to Non-Nicotine Consumer Regulatory Research Sciences Distribution & High-Speed Logistics Manufacturing Trade Unique Relationships Product Formats 49 | ALCS | CAGNY | 2.21.24 | For Investor Purposes ONLY
Slide 50: 2028 Non-Nicotine Goal
2028 Non-Nicotine Goal 2028 Enterprise Goals Corporate U.S. Smoke-Free Products Long-Term Growth Financial Share of U.S. U.S. International Policy & Total Adjusted U.S. Tobacco Smoke-Free Smoke-Free Innovative Non-Nicotine Capital OCI Margin Space Volume Revenue Smoke-Free Allocation Non-Nicotine En
Slide 51: Strong Shareholder Returns
Strong Shareholder Returns Cash Returned to Shareholders Adjusted Diluted Earnings Per Share (EPS)* ($ in Billions) +4.2% $37.5 Billion Returned Over the Past Five Years CAGR $8.1 $8.4 $7.8 $4.95 $6.9 $1.7 $1.8 $1.0 Share $6.3 $4.02 Repurchases $0.8 Dividends $6.3 $6.4 $6.6 $6.8 $6.1 2019 2020 2021
Slide 52: Delivering Strong Margins While Investing in Smoke-Free Products
Delivering Strong Margins While Investing in Smoke-Free Products Total Adjusted OCI Margin* 60.3% Our 2028 goal is to maintain a total adjusted OCI margin* of at least 60% in each of the next five years. 2023 *For reconciliations of non-GAAP to GAAP measures visit altria.com. 52 | ALCS | CAGNY | 2.2
Slide 53: Long-Standing Commitment to Dividend Growth
Long-Standing Commitment to Dividend Growth Quarterly Dividend Per Share1 • Our progressive dividend goal targets mid- +4.3% single digits dividend per share growth annually. $0.98 $0.94 • Last year, we increased our quarterly dividend by 4.3% to $0.98 per share. • This marked our 58th increase in 5
Slide 54: Balanced Approach to Deploying Excess Cash
Balanced Approach to Deploying Excess Cash Annually Produced Over $1 Billion of Cash in Excess of Our Dividend Payments.* We Will Continue to Balance: Share Investments in Debt Repurchases Our Vision Repayment *For reconciliations of non-GAAP to GAAP measures visit altria.com. 54 | ALCS | CAGNY | 2.
Slide 55: 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 $1.4 $1.1 $1.2 $0.8 $0.5 $0.5 $0.2 - - - - 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 As of year-end 2023, our consolidated Debt-to-EBITDA* ratio was 2.2x. F
Slide 56: 2024 Financial Outlook
2024 Financial Outlook • We reaffirm our guidance to deliver full-year 2024 adjusted diluted EPS1 of $5.00 to $5.152,3,4. This range represents an adjusted diluted EPS growth rate of 1% to 4% from a 2023 base of $4.95. 1 For reconciliations of non-GAAP to GAAP measures visit altria.com. 2 We expect
Slide 57: 57 ALCS | CAGNY | 2.21.24 | For Investor Purposes ONLY
57 ALCS | CAGNY | 2.21.24 | For Investor Purposes ONLY