Altria(MO) - 2025 FY - Earnings Call Transcript

Financial Data and Key Metrics Changes - Altria reported that 80.28% of its common stock was represented at the annual meeting, indicating a quorum was present [8] - The preliminary voting results showed that over 96% of shares voted in favor of the election of directors and the selection of PricewaterhouseCoopers as the independent registered public accounting firm for 2025 [22][23] - Shareholders approved the compensation of named executive officers and the 2025 performance incentive plan with more than 95% of shares voting in favor [22][23] Business Line Data and Key Metrics Changes - The company emphasized its commitment to transitioning adult smokers to smoke-free products, aligning with societal demand and creating shareholder value [24] - Altria is focusing on a portfolio approach to meet consumer needs, with plans to enhance its product offerings in the smoke-free category [40][41] Market Data and Key Metrics Changes - The company noted that nicotine use among underage consumers is declining, and menthol cigarette use is at generational lows for 2024 [53] - Altria is monitoring the impact of tariffs on consumer behavior, indicating that current effects on cost inputs are immaterial [61] Company Strategy and Development Direction - Altria's vision is to responsibly lead the transition of adult smokers to a smoke-free future, which is seen as a significant opportunity for harm reduction [24][28] - The company is advocating for the FDA to expedite the authorization of new products to enhance its portfolio and meet consumer demands [59] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the FDA's ability to function as a regulatory body and the potential for a marketplace filled with authorized products [64] - The company remains committed to its vision despite challenges, emphasizing the importance of harm reduction and consumer transition to smoke-free alternatives [64] Other Important Information - Altria's corporate responsibility reporting highlights progress towards its vision of a smoke-free future [24] - The company has resources available for consumers who wish to quit using tobacco products [32] Q&A Session Summary Question: Do you ever feel sorry for all the lives lost and illnesses caused through the use of your tobacco products? - Management emphasized the importance of harm reduction and the transition to smoke-free products as a way to reduce risks associated with nicotine [27][28] Question: Shouldn't your focus be working on alternatives to addiction? - Management reiterated the commitment to transitioning adult smokers to smoke-free products while acknowledging the potential for harm reduction [29][30] Question: Were past statements about nicotine's addictiveness incorrect? - Management acknowledged nicotine's addictive nature and highlighted resources available for consumers wishing to quit [31][32] Question: How many families have to bury their loved ones before you admit profit matters above human life? - Management reiterated the belief in harm reduction and the potential benefits of transitioning to smoke-free products [33][34] Question: Why support someone already addicted to tobacco to start using more products that they could get addicted to? - Management pointed out the importance of providing options for consumers who wish to transition to less harmful products [35][36] Question: Are flavored tobacco products attractive to teens? - Management stated that they believe kids should not use tobacco products and highlighted efforts to prevent youth access [37][38] Question: What is the timeframe for harm reduction products to outsell traditional cigarettes? - Management indicated that it is difficult to pinpoint an exact date but emphasized the need to evolve with consumer preferences [40][42] Question: Will the company consider apologizing for past marketing practices? - Management stated that all marketing practices are committed to responsible marketing to adult consumers [43][44] Question: What will the dividend policy be going forward? - Management described a progressive dividend policy aiming for annual increases in the mid-single digits [48][49] Question: How are tariffs affecting Altria's business? - Management noted that tariffs currently have an immaterial impact on cost inputs but will continue to monitor consumer behavior [61] Question: Will Altria continue its efforts to create a smoke-free future despite FDA and CDC cuts? - Management affirmed the company's commitment to its vision and the importance of regulatory authorization for new products [64]