Championing a Smoke-Free World CAGNY Conference February 18, 2026 Jacek Olczak, Group CEO PMI Emmanuel Babeau, Group CFO PMI Introduction • A glossary of terms as well as adjustments, other calculations and reconciliations to the most directly comparable U.S. GAAP measures for non-GAAP financial measures cited in this presentation are available on our Investor Relations website with additional non-GAAP reconciliations available at the end of this presentation 2 Introduction • A glossary of terms as well as ...

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Core Viewpoint - Altria Group is considered a strong buy-and-hold investment despite controversies surrounding its tobacco business, with a history of benefiting long-term investors [1]. Financial Performance - Altria shares have generated annualized returns of nearly 18% over the past five years, outperforming the S&P 500's annualized total returns of around 13% during the same period [2]. - The company has a market capitalization of $112 billion, with a current stock price of $66.54 and a dividend yield of 6.25% [3]. - Altria's total returns since February 2021 have reached 128.6%, significantly higher than the S&P 500's 85.8%, Coca-Cola's 81.7%, and Procter & Gamble's 41.6% [6]. Dividend Growth - Altria is classified as a "Dividend King," having over 50 years of consecutive dividend growth, with a forward dividend yield of 6.3% [5]. - The company has maintained steady earnings and dividend growth in the low single-digit range, primarily through price increases on smokeable products [10]. Market Position and Challenges - Altria generates approximately 88% of its total net revenue from smokeable products, lagging behind competitors like Philip Morris International, which derives around 41.5% of its revenue from smoke-free products [7][8]. - Past investments in smoke-free products, such as Juul Labs and Njoy, have resulted in significant impairment losses and legal challenges [9]. Future Outlook - Altria's modest earnings growth is expected to support its 6.3% dividend, positioning the company for solid returns in the future [11]. - The potential for valuation expansion exists, as Altria currently trades at 12 times forward earnings compared to Philip Morris International's 22 times [13]. - The company could enhance its nicotine pouch business through acquisitions, which may lead to stronger earnings growth and improved stock performance [12].

Core Viewpoint - Growth stocks are appealing due to their potential for above-average financial growth, but identifying those that can fulfill their potential is challenging due to associated risks and volatility [1] Group 1: Company Overview - Philip Morris is recommended as a cutting-edge growth stock, possessing a favorable Growth Score and a top Zacks Rank [2] - The company has a historical EPS growth rate of 4.8%, but projected EPS growth for this year is expected to be 11.9%, surpassing the industry average of 9.2% [4] Group 2: Financial Metrics - Year-over-year cash flow growth for Philip Morris stands at 14.6%, significantly higher than the industry average of 1.2% [5] - The annualized cash flow growth rate over the past 3-5 years is 8.8%, compared to the industry average of 4.5% [6] Group 3: Earnings Estimates - Current-year earnings estimates for Philip Morris have been revised upward, with the Zacks Consensus Estimate increasing by 1.4% over the past month [8] - The combination of a Growth Score of A and a Zacks Rank 2 indicates that Philip Morris is a potential outperformer and a solid choice for growth investors [10]

Core Insights - Altria Group, Inc. is focusing on sustaining its earnings per share (EPS) growth, projecting adjusted EPS of $5.56 to $5.72 for 2026, indicating a growth of approximately 2.5% to 5.5% [1][8] Earnings and Financial Management - The company is experiencing a decline in cigarette shipment volumes, which dropped about 10% in 2025, prompting reliance on price increases to maintain profitability and adjusted operating margins above 60% [2][8] - Share repurchases are significant for EPS growth, with $1 billion remaining under its repurchase authorization through the end of 2026, allowing the company to enhance per-share earnings by reducing shares outstanding [3][8] Investment in New Products - Altria is investing in smoke-free products, including nicotine pouches and e-vapor offerings, which are expanding but require ongoing investment, potentially limiting their near-term contribution to earnings [4] Competitive Landscape - In comparison, Philip Morris International Inc. is projected to achieve adjusted EPS growth of 11.1% to 13.1% in 2026, supported by its smoke-free business contributing over 40% of revenues [5] - Turning Point Brands, Inc. is also expected to maintain steady EPS growth through pricing discipline and expansion in modern oral nicotine products [6] Stock Performance and Valuation - Altria's shares have increased by 8.9% in the past month, outperforming the industry growth of 6.8% [7] - The company trades at a forward price-to-earnings ratio of 12.02X, lower than the industry average of 16.08X [9] - The Zacks Consensus Estimate for Altria's 2026 EPS has slightly decreased to $5.57, while the estimate for 2027 has increased to $5.75 [10]

Core Insights - Stoker's has launched a new sub-brand, Stoker's Proud, aimed at meeting the increasing consumer demand for high-quality and affordable tobacco products without compromising the brand's standards [1][2] Product Overview - Stoker's Proud is made with 100% American-grown tobacco and manufactured in the USA, utilizing traditional curing and flavoring processes [3] - The new product features a traditional long cut tobacco format, offering subtle differences in taste and texture compared to Stoker's signature long cut [3][10] - Stoker's Proud is available in two styles: Long Cut Straight and Long Cut Wintergreen, both in a classic 1.2-ounce can format [4][10] Market Positioning - The introduction of Stoker's Proud is a strategic extension of the Stoker's portfolio, designed to cater to value-focused consumer segments seeking more accessible price options [2][4] - The brand aims to maintain its commitment to quality and consistency while providing a distinct product experience that complements the flagship brand [2][4] Brand Heritage - Stoker's has a heritage dating back to 1940 and holds the No. 1 position in the chewing tobacco category, also being one of the fastest-growing brands in the moist snuff segment [6]

Core Viewpoint - Altria's stock has shown strong performance with a 16% increase in 2026 and a dividend yield of 6.4%, supported by its consistent dividend growth and strategic focus on nicotine products [1] Group 1: Stock Performance and Dividend - Altria's stock rose 16% in 2026, outperforming the broader market, and has increased 25% over the past year [1] - The stock offers a dividend yield of approximately 6.4% and is trading less than 2% below its 52-week high of $68.60 [1] - Altria has raised its dividend for 57 consecutive years, aiming to pay out about 80% of adjusted earnings per share as dividends [1] Group 2: Market Demand and Product Strategy - The demand for Altria's flagship Marlboro brand remains steady due to nicotine's addictive nature, allowing for price increases even amidst declining cigarette sales [1] - Traditional cigarette sales dropped about 10% in 2025, but Altria is shifting towards smoke-free products, with its on! oral nicotine pouches seeing a 10.9% increase in shipments [1] - Nicotine pouches now account for over 55% of the overall oral tobacco market, with expectations for continued growth through 2036 [1] Group 3: Regulatory Challenges - Altria faced regulatory issues that led to the withdrawal of its NJOY Ace e-vapor product from stores, with no expected return in 2026 [1] - The company is now focusing more on oral nicotine products in response to these challenges [1]

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