Altria Group, Inc.
CEO : Mr. William F. Gifford Jr.
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2022 Q4 | -0.1% YoY | 3.1% | 68.4% | 2023-02-01 |
Billy Gifford says,
Financial Performance
- Adjusted diluted earnings per share grew by 5%
- Returned more than $8.4 billion to shareholders, the largest single year cash return since 2002
Smoke-Free Product Portfolio
- Helix grew on! reported shipment volume to 82.5 million cans during its first full year of unconstrained manufacturing capacity, an increase of more than 70% versus the prior year.
- Finalized a new product design, which will provide tobacco consumers more smoke-free options within our portfolio.
- Created long-term optionality in the heated tobacco and e-vapor spaces.
Regulatory and Operating Environment
- Remain optimistic about the future of harm reduction in the U.S.
- Tobacco volumes declined by an estimated 6% for the year and 1.7% over the past five years on a compounded annual basis.
- Plans for 2023 include continued smoke-free product research, development and regulatory preparations; digital consumer engagement; and marketplace activities in support of our smoke-free products.
- Expected 2023 full year adjusted diluted EPS in the range of $4.98 to $5.13, representing an adjusted diluted EPS growth rate of 3% to 6% from a $4.84 base in 2022.
Digital Consumer Engagement
- Launched a new digital trade program last spring, and implemented these solutions in more than 33,000 stores, exceeding the goal outlined last year at CAGNY.
- Data will help Altria better understand each smoker’s journey and help them successfully transition to other smoke-free alternatives in their portfolio.
Leo Kiely
- Leo Kiely, the long-standing member of Altria’s Board, recently passed away.
- He made many contributions to Altria, including as Chair of the Compensation and Talent Development Committee and as a member of the Innovation Committee.
Sal Mancuso says,
Smokeable Products Segment Performance
- Adjusted operating income grew by 4% in Q4 2022 and 2.9% for the full year
- Adjusted OCI margins expanded by 1.4% to 59% for the full year
- Net price realization for the year was 11.1%, and in Q4, it was 13.5%
- Domestic cigarette volumes declined by 11% in Q4 and 9.5% for the full year
- Marlboro’s retail pack price increased by 6.4% in Q4
Retail Share Performance
- The industry discount segment increased 1.4 share points for the full year
- Marlboro’s retail share declined by 0.4% for the full year
- Most of the share losses were due to value options within the Marlboro brand family
- Marlboro’s share of the premium segment grew to 58.2% for the full year
Oral Tobacco Products Segment Performance
- Full year segment adjusted OCI and adjusted OCI margins contracted
- Total segment reported shipment volume declined 2.4% for the year
- Full year oral tobacco products segment retail share declined 1.3 percentage points
- The growth in the on! volume offset by lower reported MSP volumes
ABI Investment
- Recorded $571 million of adjusted equity earnings for the full year
- Viewed the ABI stake as a financial investment to maximize the long-term value of the investment for shareholders
Financial Performance and Balance Sheet Management
- Retired approximately $1.3 billion of notes coming due later this month with available cash
- Returned more than $8.4 billion in cash to shareholders last year through dividends and share repurchases
- $1 billion share repurchase program authorized earlier this week, expected to complete by the end of 2023
Q & A sessions,
Consumer Pressure and Macroeconomic Environment
- The consumer remains under pressure due to compounding inflation impact.
- Gas prices can vary depending on China reopening and other factors.
- Consumer behavior can be impacted by macroeconomic changes that affect purchasing behavior in combustible volume.
Price Realization and Implementation of RGM
- High price realization shows that it is more effective and efficient on Marlboro price promotion.
- Price realization includes list price and implementation of RGM, and overall price gap varies locality to locality.
- Personal value delivery allows Marlboro to tailor pricing on a case-by-case basis and move as close as possible to the consumer.
Nicotine Space and Inducing Trial
- Investing in inducing trial for new brands in the consideration set is necessary, especially for adult cigarette consumers.
- Data analytics and complete marketing ecosystem are utilized to transition consumers from cigarettes to novel oral pouches.
- Discount category participation is important, but growing the discount category is not the focus.
Premium Focused and RGM Tools
- Being premium focused in the cigarette space is where the profitability and high loyalty is in.
- Marlboro is resilient and positioned well with the consumer.
- Total premium share of the premium space is growing through time on the backs of Marlboro.
- RGM tools allow for getting closer to the consumer and meeting their needs on a consumer-by-consumer basis.
No bad stock 