Scandinavian Tobacco Group A/S: Interim Report, 1 January - 30 September 2023
November 08 2023 - 11:32AM
Scandinavian Tobacco Group A/S: Interim Report, 1 January - 30
September 2023
Company Announcement No. 29/023
Copenhagen, 8 November 2023
Interim Report, 1 January - 30 September
2023 Scandinavian Tobacco Group A/S Maintains
Outlook and Approves New Share Buy-Back
Programme For the third quarter of 2023, Scandinavian
Tobacco Group A/S (the “Group” or “Scandinavian Tobacco Group”)
delivered 3.9% negative net sales growth, an EBITDA margin of 26.5%
and a free cash flow before acquisitions of DKK 622 million. For
the first nine months of 2023, net sales decreased by 1.8% to DKK
6.5 billion, the EBITDA margin was 24.6% and the free cash flow
before acquisitions was positive by DKK 602 million.
Consumer trends for the cigar categories
remained unchanged throughout the third quarter. Decreasing volumes
are being partly offset by pricing and increasing sales from Growth
Enablers (retail stores, Next Generation Products “NGP” and
international sales of handmade cigars). The expectations for the
full year are based on a recovery in net sales growth for the
fourth quarter of the year primarily as result of the positive
trend in North America Online & Retail and growth in Europe
Branded and comparison to a soft fourth quarter last year. The
EBITDA margin is expected being somewhat lower than in the fourth
quarter last year as result of category and country mix combined
with higher investments in the Growth Enablers and in stabilising
the market share development in Europe Branded. The main
uncertainties to the full year expectations remain the volume
development in Europe Branded and inventory adjustments with
customers in the US.
Q3 Highlights
-
Net sales decreased by 3.9% to DKK 2.3 billion (DKK 2.4
billion).
-
Organic net sales growth was -1.1%.
-
The EBITDA margin was 26.5% (26.7%).
-
Free cash flow before acquisitions was DKK 622 million (DKK 462
million).
-
Adjusted Earnings Per Share (EPS) were DKK 4.1 (DKK 4.4).
-
Return on Invested Capital (ROIC) was 12.9% (13.2%).
-
Growth Enablers account for close to 8% of Group net sales.
-
In the first nine months of 2023, net sales decreased by 1.8% to
DKK 6.5 billion (DKK 6.6 billion), organic net sales growth was
-1.2%, the EBITDA margin was 24.6% (25.9%), free cash flow before
acquisitions was positive by DKK 602 million (DKK 735 million) and
Adjusted EPS were DKK 10.8 (DKK 11.6).
The Board of Directors has approved a share
buy-back programme of a total value of up to DKK 850 million
running to the end of February 2025. The purpose of the share
buy-back programme is to adjust the capital structure and meet
obligations relating to the Group´s share-based incentive
programme. Further details of the share buy-back including the
specific starting date will be communicated in a separate Company
Announcement.
CEO Niels Frederiksen commented:“With the
performance in the third quarter, we are on track to deliver on our
revised guidance from August with both cash flow and margin
recovering in the quarter. Although key uncertainties persist, we
continue to make good progress in the online business and the
Growth Enablers are also performing well. Whereas the market share
for Europe Branded continued to decline, we remain confident that
the more aggressive initiatives launched over the past few months
will support a stabilization”.
Financial guidance 2023
For the financial year 2023, the guidance is
unchanged:
- Net sales in the range of DKK 8.7-9.0 billion
- EBITDA margin before special items in the range of
23.5-24.5%
- Free cash flow before acquisitions in the range DKK 1.1-1.3
billion
- Adjusted EPS in the range of DKK 14.0-16.0
For further
information, please contact:Torben Sand, Head of IR &
Communication, phone +45 5084 7222 or torben.sand@st-group.comEliza
Dabbagh, IR and Communication, phone +45 5080 7619 or
eliza.michael@st-group.com
A conference call will be held on 9 November
2023 at 10.00 CEST. Dial-in information and an accompanying
presentation will be available at investor.st-group.com/investor
around 09:00 CEST.
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