Scandinavian Tobacco Group has raised its full-year guidance for 2020.
According to the company, Covid-19-induced changes in consumer behavior led to higher-than-anticipated consumption of handmade cigars in the U.S. throughout 2020. U.S. demand increased further in the latter part of the year, both online and in stores.
Between January and November 2020, STG’s net sales were 7 percent higher than previously expected.
The higher U.S. volumes have positively impacted operational leverage and resulted in stronger profit margins and an increased organic growth in EBITDA.
STG’s other business categories perform as expected.
Overall, the fourth quarter results continue to be negatively impacted by the loading in previous quarters and very strong comparison numbers partly driven by a change in sales taxes in France in the fourth quarter of 2019.
Meanwhile, an anticipated negative timing impact of payables in the fourth quarter did not materialize.
For the full year 2020, STG anticipates a positive impact on the free cash flow before acquisitions of more than DKK200 million ($32.87 million). The company expects the increased demand for handmade cigars to continue into next year.