Altria Group, Inc. · NYSE:MO
Altria — Q1 2019 Earnings Presentation
23 slides from Altria's earnings presentation, Apr 25, 2019
Slide 1: Q1 2019 Earnings Call
ALCS l Q1 2019 Earnings Call l 4.25.19 l For Investor Purposes ONLY 1
Slide 2: ALCS l Q1 2019 Earnings Call l 4.25.19 l For Investor Purposes ONLY
ALCS l Q1 2019 Earnings Call l 4.25.19 l For Investor Purposes ONLY 2
Slide 3: Adjusted diluted EPS Q1 2019
(5.3)% $0.95 $0.90 Q1 2018 Q1 2019 * For reconciliations of non-GAAP to GAAP measures visit altria.com. ALCS l Q1 2019 Earnings Call l 4.25.19 l For Investor Purposes ONLY 3
Slide 4: U.S. cigarette industry volume decline trend
Q1 Q2 Q3 Q4 Q1 2014 2015 2016 2017 2018 2018 2018 2018 2018 2019 (0.5)% (2.5)% (3.5)% (3.5)% (4)% (4.5)% (4.5)% (5)% (5)% (5.5)% Source: ALCS CMI estimates – rounded to nearest 0.5% ALCS l Q1 2019 Earnings Call l 4.25.19 l For Investor Purposes ONLY 4
Slide 5: Gas prices
$3.00 2018 2019 $2.70 $2.69 $2.52 +19% $2.24 $2.00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: U.S. Energy Information Administration ALCS l Q1 2019 Earnings Call l 4.25.19 l For Investor Purposes ONLY 5
Slide 6: Estimated annual industry volume declines 2019-2023
Last 12 Months FY 2018 ending 3/31/19 Secular Decline Rate* -2.5% -2.5% Additional Cross Category Movement (e-vapor & other) -0.4% -0.5% Total Secular Decline Rate -2.9% -3.0% Macroeconomic & Other Factors (including Gas Prices) -0.5% -0.3% Cigarette Price Elasticity -1.1% -1.2% Estimated Industry D
Slide 7: Reported shipment volume
Reported Trade Adjusted Adjusted Shipment Inventory Shipping Segment Cig Retail Share / Industry Volume Movement Days / Other Volume Other Volume ~ 2% ~ 1.4% ~ (5%) ~ 5.9% ~ (7%) (14.3%) Source: ALCS CMI estimates ALCS l Q1 2019 Earnings Call l 4.25.19 l For Investor Purposes ONLY 7
Slide 8: Cigarette retail share trend
+1.3 -0.4 3.9 2.6 2.4 2.0 Q4 2017 Q1 2018 Q4 2018 Q1 2019 Source: ALCS CMI estimates ALCS l Q1 2019 Earnings Call l 4.25.19 l For Investor Purposes ONLY 8
Slide 9: Marlboro retail share and revenue per unit
8.2% 3.6pp $155.65 $143.84 49.7% 53.3% Q1 2018 Q1 2019 Q1 2018 Q1 2019 * For reconciliations of non-GAAP to GAAP measures visit altria.com. ALCS l Q1 2019 Earnings Call l 4.25.19 l For Investor Purposes ONLY 9
Slide 10: California SET retail share
California SET 43.8 43.6 43.3 43.2 43.3 43.3 43.2 43.1 43.1 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Source: IRI/MSAi InfoScan Cigarette 2019 – Blended, as of 3/31/19 ALCS l Q1 2019 Earnings Call l 4.25.19 l For Investor Purposes ONLY 10
Slide 11: Discount segment share
Deep Discount Branded Discount 10 30 25.0 24.7 24.4 23.8 23.7 23.8 24.1 18.3 18.1 17.7 17.0 16.5 15.9 15.6 4.1 4.4 4.5 4.6 4.4 4.2 3.8 6.8 7.2 7.9 8.5 6.7 6.6 6.7 0 0 2013 2014 2015 2016 2017 2018 Q1 2013 2014 2015 2016 2017 2018 Q1 2019 2019 Source: IRI/MSAi InfoScan Cigarette 2019 – Blended, as of
Slide 12: Smokeless products
+0.9pp +0.7pp 7.9% $367 34.3 35.0 $340 33.4 Q1 2018 Q1 2019 Q1 2017 Q1 2018 Q1 2019 * For reconciliations of non-GAAP to GAAP measures visit altria.com. Source: IRI InfoScan Smokeless 2019, as of 3/31/2019 ALCS l Q1 2019 Earnings Call l 4.25.19 l For Investor Purposes ONLY 12
Slide 13: ALCS l Q1 2019 Earnings Call l 4.25.19 l For Investor Purposes ONLY
ALCS l Q1 2019 Earnings Call l 4.25.19 l For Investor Purposes ONLY 13
Slide 14: E-vapor category volume
30 20 15.1 12.9 13.0 12.2 10.4 15.3 9.0 11.5 0 0 2014 2015 2016 2017 2018 Feb Feb 2018 Feb 2019 2019 Note: LA+ Source: ATCT Jul 2013 to Feb 2019 ALCS l Q1 2019 Earnings Call l 4.25.19 l For Investor Purposes ONLY 14
Slide 15: JUUL share and growth
JUUL ~35% Category JUUL ~40% Category 2.0 Y/Y Growth 1.0 Y/Y Growth 1.5 1.1 1.1 0.5 1.0 1.0 0.1 0.44 0.6 0.0 0.31 0.0 0.0 2013 2014 2015 2016 2017 2018 Q1 2018 Q1 2019 Source: ALCS CMI estimates based on: IRI MOC; STARS; Capstone; & comScore, ATCT. Note: Volume equivalized to cartridges (1 disposabl
Slide 16: JUUL growth year over year
~175% 175 64 Q1 2018 Q1 2019 Source: JUUL Labs, Inc. ALCS l Q1 2019 Earnings Call l 4.25.19 l For Investor Purposes ONLY 16
Slide 17: JUUL share of category
~43% ~34% FY 2018 Q1 2019 Source: ALCS CMI estimates based on: IRI MOC; STARS; Capstone; & comScore, ATCT. Note: Volume equivalized to cartridges (1 disposable = 1 cartridge = 1mL e-liquid) ALCS l Q1 2019 Earnings Call l 4.25.19 l For Investor Purposes ONLY 17
Slide 18: JUUL quarterly volume
JUUL 0.42 0.44 0.39 0.35 0.31 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Source: ALCS CMI estimates based on: IRI MOC; STARS; Capstone; & comScore, ATCT. Note: Volume equivalized to cartridges (1 disposable = 1 cartridge = 1mL e-liquid) * Percentages do not foot due to rounding ALCS l Q1 2019 Earnings
Slide 19: JUUL share in Canada
100% JUUL Comp 1 Other JUUL increased its 80.1% leading position in the Sainsbury’s chain to a dollar share in excess of 27% by the end of March 19.8% from 23% in late January. 0% 0.2% Note: Stores selling represent 15% of e-vapor distribution in Canada, Source: JUUL, IRI as of 3.31.19 Numbers do no
Slide 20: JUUL international expansion
Recently launched in Spain, now available in 9 countries outside the U.S. By mid-March, JUUL was available in over 8,500 stores throughout France, Germany, Italy & Switzerland JUUL plans to test several products in limited international markets this year Includes a next-generation, Bluetoo
Slide 21: Legislation to raise legal age to purchase tobacco to 21
38% Pending 8% Bipartisan legislation is being introduced to raise 11% 2019 the legal age to purchase tobacco to 21 at the Before 19% 2019 federal level. % of U.S. Population Note: Before 2019: California, Oregon, Maine, New Jersey, Hawaii, Massachusetts 2019: Arkansas, Illinois, Delaware, Utah, Vir
Slide 22: Reaffirmed 2019 EPS guidance
We reaffirm our guidance to deliver full-year 2019 adjusted diluted earnings per share of $4.15 to $4.27. This range represents a growth rate of 4% to 7% from a 2018 adjusted diluted EPS base of $3.99*. * For reconciliations of non-GAAP to GAAP measures visit altria.com. ALCS l Q1 2019 E
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