STG Reports Results

Scandinavian Tobacco Group (STG) reported net sales of DKK1.85 billion ($273 million) in the third quarter of 2019, down from DKK1.89 billion in the comparable 2018 period.

Earnings before interest, taxes, depreciation and amortization and before special items were DKK446 million compared with DKK398 million during the third quarter of 2018.

“In the third quarter of the year, we deliver organic EBITDA growth of 5.4 percent, continued margin improvements and a strong free cash flow despite a disappointing development in organic net sales,” said STG CEO Niels Frederiksen.

“This follows better-than-expected progress from our transformational program Fueling the Growth and continued cash flow focus across our business. During the quarter, we were also able to announce our intention to acquire Royal Agio Cigars—a significant step in support of our ambition to become the undisputed leader in cigars and pipe tobacco.”

STG revised its full-year guidance for free cash flow to about DKK1 billion. The revised expectation includes transaction costs from the Royal Agio Cigars acquisition of about DKK20 million, costs for the closure of STG’s Lane facility in the U.S. of up to DKK120 million and lower than previously anticipated costs relating to the Fueling the Growth program.