Altria's Operating Companies Report a Productive 2015

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Altria's Operating Companies Report a Productive 2015

By Melissa Kress, Convenience Store News - 02/01/2016

RICHMOND, Va. — Innovation is driving improved results from Altria Group Inc.'s operating companies.

By the numbers, the Richmond-based tobacco leader grew full-year 2015 adjusted earnings per share (EPS) by nearly 9 percent, which was in line with its long-term EPS growth objective. In addition, it returned nearly $4.2 billion in dividends to shareholders, consistent with the company's goal of paying out approximately 80 percent of adjusted diluted EPS, said Marty Barrington, chairman, CEO and president.

Altria also completed a $1-billion share repurchase program and announced a new $1-billion share repurchase program that it expects to complete by the end of 2016.

"Our core tobacco companies delivered on their objectives by growing income and strengthening their market leadership position," Barrington stated.

Addressing specific products, the chief executive noted that it is too early to talk about the results of Philip Morris USA's national expansion of Marlboro Midnight Menthol, which took place in November. However, he did say the company "expects Marlboro Midnight Menthol to build on the very positive momentum we've seen from the Marlboro Black family, which now has grown 20 consecutive quarters."

On the smokeless side, Altria's U.S. Smokeless Tobacco Co. is bringing Copenhagen Mint to the national market later this quarter.

And in the area of brand-new, innovative tobacco products, Altria's Nu Mark LLC is continuing to build a portfolio of new tobacco products using its strong internal capabilities and its partnership with Philip Morris International (PMI). In November, based on encouraging results from lead markets, Nu Mark continued its disciplined expansion of MarkTen XL e-vapor products to additional select retail chains, Barrington explained.

"With respect to heat-not-burn products, we continue to support PMI as it prepares for a 2016 product application to the FDA for a modified-risk tobacco product designation," he said. "We look forward to discussing more about our plans for U.S. commercialization at the appropriate time."

Barrington also called the performance of Green Smoke in test markets "encouraging." Nu Mark acquired Green Smoke in 2014 and began distributing the products in the convenience channel this past June.

"I think we really have improved the Green Smoke platform. We have it in a number of retail stores. It's been very well received. It continues to be the leader in the e-commerce space," he explained. "We are working on that brand portfolio strategy now, but we are very glad to have Green Smoke in our portfolio and the brand has helped us from a supply chain point-of-view immensely."

Altria Group Inc. is the parent company for Philip Morris USA, John Middleton, U.S. Smokeless Tobacco Co., Nu Mark and Ste. Michele Wine Estates. Altria also holds a continuing economic and voting interest in SABMiller.

The brand portfolios of Altria’s tobacco operating companies include Marlboro, Black & Mild, Copenhagen, Skoal, MarkTen and Green Smoke.