Altria Group, Inc., a leader in the U.S. tobacco industry, continues to operate in a dynamic environment with a focus on reducing tobacco-related risks and optimizing its operations through strategic agreements and targeted investments.
Recent financial results
For the first quarter of 2024, Altria reported net revenues of USD 5.576 billion, down 2.5% from the previous year. Net revenue after excise taxes reached USD 4.717 billion, recording a decline of 1.0%. Despite this decline, Altria maintained adjusted EPS of $1.18, reflecting effective cost management and a reduction in the number of shares outstanding.
Mature businesses and high margins
Altria benefits from a mature business with low but stable growth, offset by high profit margins and operational efficiency. The company has managed to maintain adjusted operating margins around 60%, mainly due to higher prices and rigorous cost management. Altria also generates significant returns for its shareholders, with share buyback programs and regular dividends, aimed at maximizing value for investors.
Future Growth Strategies
Although its core businesses show limited growth, Altria is actively seeking growth levers for the future. The company invests in smoke-free products, particularly with brands like on! and the marketing of NJOY. Altria is also committed to leading a responsible transition of adult smokers to potentially less harmful alternatives, developing heated tobacco products and oral nicotine sachets.
Strategic transition with IQOS
Altria recently entered into an agreement with Philip Morris International (PMI) to assign exclusive marketing rights to the IQOS heated tobacco system in the United States. This transaction, which will take effect in April 2024, will allow Altria to receive USD 2.7 billion in pre-taxable payments. This agreement provides Altria with increased flexibility to allocate its resources toward risk reduction initiatives and other strategic opportunities.
Outlook
For the year 2024, Altria plans to maintain modest growth in its adjusted EPS, between 2% and 4.5%, and to continue its investments in risk reduction products. The company also anticipates investments between 175 and 225 million USD to support its strategic initiatives. The sale of IQOS commercialization rights is expected to strengthen Altria's ability to invest in advanced technologies and meet evolving consumer expectations.
You will find in PJ an Altria presentation file.
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