RICHMOND - Altria Group, Inc. (NYSE: MO) today reports our 2023 fourth-quarter and full-year business results and provides our guidance for 2024 full-year adjusted diluted earnings per share (EPS).
'It was a pivotal year for Altria as we made significant progress in pursuit of our Vision by enhancing our smoke-free product portfolio while our businesses performed well in a challenging environment,' said Billy Gifford, Altria's Chief Executive Officer. 'We grew adjusted diluted EPS by 2.3% and continued our long history of rewarding shareholders by delivering nearly $7.8 billion in dividends and share repurchases.'
'Our plans for 2024 include a continuation of our strategy to balance earnings growth and shareholder returns with strategic investments toward our Vision. We expect to deliver 2024 full-year adjusted diluted EPS in a range of $5.00 to $5.15, representing a growth rate of 1% to 4% from a $4.95 base in 2023.'
Business Update
On June 1, 2023, we completed our acquisition of NJOY Holdings, Inc. (NJOY Transaction). Our teams executed NJOY's business plans with speed and focus after the completion of the NJOY Transaction. Our efforts were concentrated on: Strengthening NJOY's global supply chain to provide sustainable support for the anticipated volume increase associated with our NJOY ACE (ACE) expansion plans. We expect to have the needed capacity to support our expansion plans for ACE;
Filling inventory gaps at retail and expanding distribution of ACE to a total of 75,000 stores as of year-end, an increase of 40,000 stores since the completion of the NJOY Transaction. These stores represent approximately 75% of e-vapor volume and 55% of cigarette volume sold in the U.S. multi-outlet and convenience channel; Generating awareness of ACE by amplifying visibility and establishing strong positioning at retail and Refining our understanding of adult vapers to inform our consumer engagement strategies.
Business Results
For the fourth quarter: Reported shipment volume of NJOY consumables was approximately 11.1 million units.
Reported shipment volume of NJOY devices was approximately 0.9 million units.
Retail share of NJOY in the U.S. multi-outlet and convenience channel was 3.7%.
Since June 1, 2023: Reported shipment volume of NJOY consumables was approximately 23.0 million units.
Reported shipment volume of NJOY devices was approximately 1.3 million units.
Cash Returns to Shareholders
Share Repurchase Program
We completed our previously authorized $1 billion share repurchase program. In the fourth quarter, we repurchased 6.5 million shares at an average price of $41.41. For the full year, we repurchased 22.7 million shares at an average price of $43.96, for a total cost of $1 billion.
Our Board of Directors (Board) authorized a new $1 billion share repurchase program, which we expect to complete by December 31, 2024. Share repurchases depend on marketplace conditions and other factors, and the program remains subject to the discretion of our Board.
Dividends
We paid dividends of $1.7 billion in the fourth quarter and $6.8 billion for the full year.
2028 Enterprise Goals
At our 2023 Investor Day, we announced our 2028 Enterprise Goals and our commitment to provide annual updates on our progress. Our 2028 goals and our progress through 2023 are listed below:
Corporate
Deliver a mid-single digits adjusted diluted EPS compounded annual growth rate in 2028 from a $4.84 base in 2022.
In 2023, we delivered adjusted diluted EPS growth of 2.3%
A progressive dividend goal targeting mid-single digits dividend per share growth annually through 2028.
In 2023, we increased our dividend by 4.3%. Future dividend payments remain subject to the discretion of our Board.
Maintain a debt-to-EBITDA ratio of approximately 2.0x.
At year end, our debt-to-consolidated net earnings ratio was 3.2x and our debt-to-EBITDA ratio was 2.2x1.
Maintain our leadership position in the U.S. tobacco space.
On the strength of our brands Marlboro, Copenhagen, Black & Mild, on! and NJOY, we maintained our leadership position in 2023.
Maintain a total adjusted OCI margin of at least 60% in each year through 2028.
For 2023, our total OCI margin was 60.1% and our total adjusted OCI margin was 60.3%1.
U.S. Smoke-Free Portfolio
Grow U.S. smoke-free volumes by at least 35% from our 2022 base of 800 million units.
Our smoke-free volumes were essentially flat in 2023 when compared to 2022.
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.
In 2023, total smoke-free net revenue was $2.7 billion and revenue from innovative smoke-free products was $165 million.
Long-Term Growth
Our aspiration is to compete in the international innovative smoke-free markets and enter into non-nicotine categories.
We are evaluating these opportunities and expect to provide updates on our progress at CAGNY.
Environmental, Social and Governance
Our Corporate Responsibility Focus Areas are: (i) reduce the harm of tobacco products, (ii) prevent underage use, (iii) protect the environment, (iv) drive responsibility through our value chain, (v) support our people and communities and (vi) engage and lead responsibly. Our corporate responsibility reports are available on the Responsibility section of www.altria.com.
In November 2023, the 2023 National Youth Tobacco Survey estimated smoking rates among middle and high school students was 1.6%, an over 85% reduction since 2011 when cigarette smoking prevalence was estimated at 10.8%. The prevalence of past 30-day e-cigarette use among middle and high school students was estimated at 7.7% in 2023 versus its 2019 peak of 20%.
At year-end 2023, we believe we achieved all our 2030 environmental targets. We submitted new environmental targets to the Science Based Targets initiative for validation and we expect to announce them in the coming months.
In November 2023, we published the Task Force on Climate-related Financial Disclosures (TCFD) index as a follow-up to our full 2021 TCFD report. This index provides timely updates to the dynamic aspects of our approach to identifying and managing climate risk and opportunities.
In 2023, we were ranked 5th among the top 1,000 companies in the FTSE Russell Index by The Center for Political Accountability-Zicklin Index in terms of voluntary disclosures of our political spending. We were recognized as a 'trendsetter' in this area for the 8th consecutive year.
For the 6th year, we received a perfect score of 100 in Human Rights Campaign's 2023 Corporate Equality Index for LGBTQ-inclusive workplace policies and practices.
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, Helix Innovations LLC (Helix), a leading manufacturer of oral nicotine pouches, and NJOY, LLC (NJOY), currently the only e-vapor manufacturer to receive market authorizations from the U.S. Food and Drug Administration (FDA) for a pod-based e-vapor product.
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 operating companies include Marlboro, Black & Mild, Copenhagen, Skoal, on! and NJOY. Trademarks related to Altria referenced in this release are the property of Altria or our subsidiaries or are used with permission.
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 and our Quarterly Reports on Form 10-Q. These factors include the following: our inability to anticipate and respond to changes in adult tobacco consumer preferences and purchase behavior; our inability to compete effectively; the growth of the e-vapor category, including illegal flavored disposable e-vapor products, and other innovative tobacco products, including oral nicotine pouches, contributing to reductions in cigarette and MST consumption levels and shipment volume; our failure to commercialize innovative products, including tobacco products that may reduce health risks relative to other tobacco products and appeal to adult tobacco consumers; changes, including in macroeconomic and geopolitical conditions (including inflation), that result in shifts in adult tobacco consumer disposable income and purchasing behavior, including choosing lower-priced and discount brands or products, and reductions in shipment volumes; unfavorable outcomes with respect to litigation proceedings or any governmental investigations; the risks associated with significant federal, state and local government actions, including FDA regulatory actions, and various private sector actions; increases in tobacco product-related taxes; our failure to complete or manage successfully strategic transactions, including acquisitions, dispositions, joint ventures and investments in third parties, or realize the anticipated benefits of such transactions; significant changes in price, availability or quality of tobacco, other raw materials or component parts, including as a result of changes in macroeconomic, climate and geopolitical conditions; our reliance on a few significant facilities and a small number of key suppliers, distributors and distribution chain service providers and the risks associated with an extended disruption at a facility or in service by a supplier, distributor or distribution chain service provider; the risk that we may be required to write down intangible assets, including trademarks and goodwill, due to impairment; the risk that we could decide, or be required to, recall products; the various risks related to health epidemics and pandemics, and the measures that international, federal, state and local governments, agencies, law enforcement and health authorities implement to address them; our inability to attract and retain a highly skilled and diverse workforce due to the decreasing social acceptance of tobacco usage, tobacco control actions and other factors; the risks associated with the various U.S. and foreign laws and regulations to which we are subject due to our international business operations; the risks concerning a challenge to our tax positions, an increase in the income tax rate or other changes to federal or state tax laws; the risks associated with legal and regulatory requirements related to climate change and other environmental sustainability matters; disruption and uncertainty in the credit and capital markets, including risk of losing access to these markets; a downgrade or potential downgrade of our credit ratings; our inability to attract investors due to increasing investor expectations of our performance relating to corporate responsibility factors; the failure of our, or our key service providers' or key suppliers', information systems to function as intended, or cyber-attacks or security breaches; our failure, or the failure of our key service providers or key suppliers, to comply with personal data protection, privacy, artificial intelligence and information security laws; the risk that the expected benefits of our investment in ABI may not materialize in the expected manner or timeframe or at all, including due to macroeconomic and geopolitical conditions; foreign currency exchange rates; ABI's business results; ABI's share price; impairment losses on the value of our investment; our incurrence of additional tax liabilities related to our investment in ABI and potential reductions in the number of directors that we can have appointed to the ABI board of directors and the risks associated with our investment in Cronos, including legal, regulatory and reputational risks and the risk that the expected benefits of the transaction may not materialize in the expected timeframe or at all.
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.
Contact:
Tel: 804-484-8222
ALTRIA GROUP, INC. 
