RICHMOND, Va.--(BUSINESS WIRE)--Mar 23, 2023--
Altria Group, Inc. (NYSE:MO) hosted an investor day conference at the New York Stock Exchange in New York City, New York earlier today. Billy Gifford, Altria’s Chief Executive Officer, and other members of our senior management team highlighted our progress toward our Vision, introduced our 2028 Enterprise Goals and provided updates on internal product development efforts for smoke-free products.
Copies of the prepared remarks, presentations and a replay of the webcast are available on www.altria.com.
2028 Enterprise Goals
We announced our new 2028 Enterprise Goals. These goals include corporate financial metrics and specific U.S. smoke-free volume and revenue targets. These goals assume the successful completion of our previously announced acquisition of NJOY Holdings, Inc. (NJOY). We also announced our aspirations to compete beyond the U.S. nicotine space.
Corporate
Our corporate goals include financial policy and capital allocation, share of the U.S. tobacco space and total adjusted operating companies income (OCI) margin.
In financial policy and capital allocation, we set goals for adjusted diluted earnings per share (EPS) growth, dividend growth and leverage.
For share of the U.S. tobacco space, our goal is to maintain our leadership position.
Our total adjusted OCI margin goal is to maintain a margin of at least 60% each year through 2028.
U.S. Smoke-Free Portfolio
We established two new goals for our U.S. smoke-free portfolio, including smoke-free volume and smoke-free revenue. For U.S. smoke-free volume, our goal is to grow volumes by at least 35% from our 2022 base of 800 million units. For U.S. smoke-free revenue, our goal is to approximately double our smoke-free net revenues to $5 billion from our 2022 base of $2.6 billion, with $2 billion coming from innovative smoke-free products.
Long-Term Growth
We announced our aspirations to compete in the international innovative smoke-free and non-nicotine categories. We believe the international smoke-free and non-nicotine categories combined represent multi-billion dollar opportunities for us. Our teams are evaluating these opportunities and expect to finalize strategies for these growth areas over the next 12 months. We intend to share specific goals for these areas once established.
Internal Product Development Efforts
We provided updates on our progress toward building a compelling portfolio of smoke-free products. We unveiled SWIC, our heated tobacco capsule product, and on! PLUS, our newest oral tobacco innovation.
SWIC and on! PLUS are in development, and we have not yet filed pre-market tobacco product applications with the U.S. Food and Drug Administration (FDA) for these products. We look forward to bringing these products to ATCs in the coming years, upon regulatory authorization.
2023 Full-Year Guidance
We reaffirm our guidance to deliver 2023 full-year adjusted diluted EPS in a range of $4.98 to $5.13, representing a growth rate of 3% to 6% from an adjusted diluted EPS base of $4.84 in 2022, as shown in Schedule 1. While the 2023 full-year adjusted diluted EPS guidance accounts for a range of scenarios, the external environment remains dynamic. We will continue to monitor conditions related to (i) the economy, including the impact of high inflation, rising interest rates and global supply chain disruptions, (ii) ATC dynamics, including disposable income, purchasing patterns and adoption of smoke-free products, and (iii) regulatory and legislative developments.
Our 2023 full-year adjusted diluted EPS guidance range includes planned investments in support of our Vision, such as (i) continued smoke-free product research, development and regulatory preparation expenses, (ii) enhancement of our digital consumer engagement system and (iii) marketplace activities in support of our smoke-free products. The guidance range also includes lower expected net periodic benefit income due to market factors, including higher interest rates, and the impact of the 2022 completion of the Philip Morris Capital Corporation wind-down. This guidance range does not include the potential financial impacts of our previously announced acquisition of NJOY.
Our full-year adjusted diluted EPS guidance range excludes the impact of certain income and expense items that management believes are not part of underlying operations. These items may include, for example, loss on early extinguishment of debt, restructuring charges, asset impairment charges, acquisition-related and disposition-related costs, equity investment-related special items (including any changes in fair value of our equity investment recorded at fair value and any changes in the fair value of related warrants and preemptive rights), certain income tax items, charges associated with tobacco and health and certain other litigation items, and resolutions of certain non-participating manufacturer (NPM) adjustment disputes under the Master Settlement Agreement (such dispute resolutions are referred to as NPM Adjustment Items).
Our management cannot estimate on a forward-looking basis the impact of certain income and expense items, including those items noted in the preceding paragraph, on our reported diluted EPS because these items, which could be significant, may be unusual or infrequent, are difficult to predict and may be highly variable. As a result, we do not provide a corresponding U.S. generally accepted accounting principles (GAAP) measure for, or reconciliation to, our adjusted diluted EPS guidance.
Altria’s Profile
We have a leading portfolio of tobacco products for U.S. tobacco consumers age 21+. Our Vision is to responsibly lead the transition of adult smokers to a smoke-free future (Vision). We are Moving Beyond Smoking ™, leading the way in moving adult smokers away from cigarettes by taking action to transition millions to potentially less harmful choices - believing it is a substantial opportunity for adult tobacco consumers, our businesses and society.
Our wholly owned subsidiaries include leading manufacturers of both combustible and smoke-free products. In combustibles, we own Philip Morris USA Inc. (PM USA), the most profitable U.S. cigarette manufacturer, and John Middleton Co. (Middleton), a leading U.S. cigar manufacturer. Our smoke-free portfolio includes ownership of U.S. Smokeless Tobacco Company LLC (USSTC), the leading global moist smokeless tobacco (MST) manufacturer, and Helix Innovations LLC (Helix), a leading manufacturer of oral nicotine pouches.
Additionally, we have a majority-owned joint venture, Horizon Innovations LLC (Horizon), for the U.S. marketing and commercialization of heated tobacco stick products and, through a separate agreement, we have the exclusive U.S. commercialization rights to the IQOS Tobacco Heating System® and Marlboro HeatSticks® through April 2024.
Our equity investments include Anheuser-Busch InBev SA/NV (ABI), the world’s largest brewer, and Cronos Group Inc. (Cronos), a leading Canadian cannabinoid company.
The brand portfolios of our tobacco operating companies include Marlboro ®, Black & Mild ®, Copenhagen ®, Skoal ® and on! ®. Trademarks and service marks related to Altria referenced in this release are the property of Altria or its subsidiaries or are used with permission.
Learn more about Altria at www.altria.com and follow us on Twitter, Facebook and LinkedIn.
Forward-Looking and Cautionary Statements
This release contains projections of future results and other forward-looking statements that are subject to a number of risks and uncertainties and are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995.
Important factors that may cause actual results to differ materially from those contained in the forward-looking statements included in this release are described in our publicly filed reports, including our Annual Report on Form 10-K for the year ended December 31, 2022. These factors include the following:
You should understand that it is not possible to predict or identify all factors and risks. Consequently, you should not consider the foregoing list complete. We do not undertake to update any forward-looking statement that we may make from time to time except as required by applicable law. All subsequent written and oral forward-looking statements attributable to Altria or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements referenced above.
Schedule 1 | ||||||||||||||||||||
ALTRIA GROUP, INC. and Subsidiaries Reconciliation of GAAP and non-GAAP Measures (dollars in millions, except per share data) (Unaudited) | ||||||||||||||||||||
Reconciliation of Altria’s Full-Year 2022 Adjusted Results | ||||||||||||||||||||
| Earnings before Income Taxes | Provision for Income Taxes | Net Earnings | Net Earnings Attributable to Altria | Diluted EPS | |||||||||||||||
2022 Reported | $ | 7,389 |
| $ | 1,625 |
| $ | 5,764 |
| $ | 5,764 |
| $ | 3.19 |
| |||||
NPM Adjustment Items |
| (68 | ) |
| (17 | ) |
| (51 | ) |
| (51 | ) |
| (0.03 | ) | |||||
Asset impairment, exit, implementation, acquisition and disposition-related costs |
| 11 |
|
| 2 |
|
| 9 |
|
| 9 |
|
| — |
| |||||
Tobacco and health and certain other litigation items |
| 131 |
|
| 33 |
|
| 98 |
|
| 98 |
|
| 0.05 |
| |||||
JUUL changes in fair value |
| 1,455 |
|
| — |
|
| 1,455 |
|
| 1,455 |
|
| 0.81 |
| |||||
ABI-related special items |
| 2,544 |
|
| 534 |
|
| 2,010 |
|
| 2,010 |
|
| 1.12 |
| |||||
Cronos-related special items |
| 186 |
|
| — |
|
| 186 |
|
| 186 |
|
| 0.10 |
| |||||
Income tax items |
| — |
|
| 729 |
|
| (729 | ) |
| (729 | ) |
| (0.40 | ) | |||||
2022 Adjusted for Special Items | $ | 11,648 |
| $ | 2,906 |
| $ | 8,742 |
| $ | 8,742 |
| $ | 4.84 |
|
While we report our financial results in accordance with GAAP, our management reviews certain financial results, including diluted EPS, on an adjusted basis, which excludes certain income and expense items, including those items noted under “2023 Full-Year Guidance” in the release. Our management does not view any of these special items to be part of our underlying results as they may be highly variable, may be unusual or infrequent, are difficult to predict and can distort underlying business trends and results. Our management believes that adjusted financial measures provide useful additional insight into underlying business trends and results and provide a more meaningful comparison of year-over-year results. Our management uses adjusted financial measures for planning, forecasting and evaluating business and financial performance, including allocating resources and evaluating results relative to employee compensation targets. These adjusted financial measures are not required by, or calculated in accordance with GAAP and may not be calculated the same as similarly titled measures used by other companies. These adjusted financial measures should thus be considered as supplemental in nature and not considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP.
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CONTACT: Altria Client Services
Investor Relations
804-484-8222Altria Client Services
Media Relations
804-484-8897
KEYWORD: UNITED STATES NORTH AMERICA VIRGINIA
INDUSTRY KEYWORD: TOBACCO RETAIL
SOURCE: Altria Group, Inc.
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PUB: 03/23/2023 04:30 PM/DISC: 03/23/2023 04:32 PM
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