Altria Investor Day Notes

Investment in developing people drives our results

“We’ve long believed our emphasis on and investment in developing people sets us apart and drives our business results. We were delighted recently when Forbes named ” among its top 100 list of America’s Best Employers. Our focus on people development supports a strong and deep management bench and effective succession planning.”

Three strategies: core, innovative products and financial performance

“We continue to pursue three strategies to deliver against our long term financial objectives, first to maximize our core tobacco businesses for the long term, second to grow new income streams through innovative tobacco products, and third to manage our diverse income streams and strong balance sheet to deliver consistent financial performance.”

We’ve embraced lower risk tobacco products

“For many years, we’ve embraced the vision of developing lower risk tobacco products that appeal to adult tobacco consumers. That’s one reason we supported FDA regulation of tobacco, and today real progress is being made.”

Developing the science needed to succeed in regulatory arena

“We’re also developing the science needed to succeed in the regulatory arena such as the recent data we presented to FDA on second hand vapor. And we are fully engaged in the modified risk tobacco product application process, in order to take advantage of the opportunities it offers for our businesses and adult tobacco consumers”

If there’s one thing Altria knows how to do it’s excel in a difficult environment

“Our final introductory word, given recent changes in industry structure. Market place change is of course constant. The recent transaction involving our competitors marks another one. It’s important to remember that we’d faced change before, lots of it, and we believe our leadership position today is stronger than ever. Consider for example, the signing of the Master Settlement Agreement, a 2004 consolidation of two competitors, a massive increase in the federal excise tax on cigarettes and cigars, and institution of FDA regulation of tobacco products. During this period of change over 15 years, PM USA grew Marlboro, retail share almost seven points. Altria evolved to offer a total U.S tobacco platform, while delivering TSR of more than 1,000% more than five times the S&P 500s return. As I hope, we’ll make clear today, we manage our businesses for the long-term which has allowed us to grow through change and deliver consistent performance. We do sell because of our company’s extraordinary brands, superior execution, and talented people.”

Immerse consumers in the equity of our brands

“We also immersed tobacco consumers 21 and older in the equity of our brands through experiences like Marlboro Black Lounge, Bar Nights, music festivals and once in a lifetime trips to the Marlboro Ranch in Montana. In total, our consumer engagement system delivered a remarkable 250 million interactions with adult tobacco consumers in 2014 up 20% from the previous year. As you will hear later, these interactions further our tobacco Company’s strong brand equities.”

Our goal is alignment and support of our partners by promoting mutual business success

“To consistently achieve our success we follow a proven strategy. Our goal is to gain alignment and support from our trade partners by promoting and demonstrating mutual business success. It begins with our world class distribution system which efficiently delivers products from our Company’s manufacturing facilities to our direct buying customers.’

Provide category and market analytics to our customers

“Our ability to provide category and market analytics to our customers also give our tobacco companies a competitive advantage. Our customers tell us that actionable insights are more important than ever. For example, retailers may understand the volume and share for the brands they sell, but not how their store performs against the local market. Our proprietary reporting system provides relevant store-level data for the tobacco categories. We can show customers how many stores are gaining or losing market share at an aggregate and store level. Then our sales team consults with retailers on how to capitalize on those insights to build their business.”

Bring in interns to experience AGDC

“we bring in over 100 interns annually to experience AGDC prior to their final year of school. Last year, 85% of these interns accepted the full-time offers we extended. And often these efforts result in leaders who rise rapidly through our organization. “