Howard Willard P.15 - P. 16
Yeah, I mean, you are right that essentially we are cross-promoting, which is a fairly common thing and I think you may be thinking about the fact that we have a 35% economic interest in Juul and we have 100% economic interests in our cigarette business. And so that may be what's causing you to be surprised we would be willing to do this. I think I would frame it with a couple of thoughts. First of all, we think that even with the impact that the Juul could have on the overall volume growth and potential profit growth from our cigarette business going forward, even if it does impact it, we think when you take the sum of our of our cigarette profitability growth and you combine it with the economic contribution from Juul over the next five years, we think that's a net positive to us. And it's a net positive even if there's a bit more growth in Juul coming from our brands than from the competitors. So that's the first reason.
"The second reason is if you look at it, we four, frankly I've been with the company 26 years, almost my entire career. We have believed that our business would be better in the long-term if we could offer harm-reduced products that would represent attractive alternatives to our adult cigarette smokers to switch. And we've invested billions of dollars in it and lots of effort and ultimately, until December of this year, we really didn't have the product portfolio to fully achieve our harm reduction aspiration. And the opportunity to invest in Juul, I think really makes that harm reduction aspiration a reality. And if you look at it, we've got IQOS and the heat-not-burn category, the number one product and brand in that category. We've got Copenhagen and Skull and the oral tobacco products category and we had a hole in the e-vapor category and we've now filled that with our 35% economic interest in Juul.
*** "So I think that we are finally going to be able to achieve our harm reduction aspiration. And I think we can do that over the next 10 years and still deliver our long-term 7% to 9% EPS growth algorithm and give 80% of that adjusted EPS back to shareholders in the form of dividends. And I think our ability to achieve both harm reduction and secure our long-term financial performance was enhanced by the investment in Juul."
***MUSIC TO MY EARS!!! I love it they use the word "algorithm" when referring to their DIVIDEND GROWTH!!!!!
And I think we can do that over the next 10 years and still deliver our long-term 7% to 9% EPS growth algorithm and give 80% of that adjusted EPS back to shareholders in the form of dividends.
Disclosure: I am/we are long MO.