• June 25, 2024

STG: Stable Sales Despite Headwinds

 STG: Stable Sales Despite Headwinds
Photo: STG

Scandinavian Tobacco Group’s (STG’s) organic net sales declined by 1 percent in the third quarter of 2022, in line with the company’s performance expectations for the full year.

Consumption in the company’s product categories has remained resilient in recent months, according to STG. When combined with strong price management, this has resulted in organic net sales remaining relatively stable as compared to last year, despite the third quarter being impacted by the return to the prepandemic market mix, the firm explained in a press note.

STG said that increasing cost inflation across the entire value chain and continued promotional pressure in the online business is negatively impacting the group’s EBITDA margin. While the group has been working to improve productivity in its supply chain, STG expects these issues to persist into 2023 due in part to its complex portfolio.

"In the current environment, I'm pleased with our performance for the third quarter, delivering solid cash flows and positive EPS growth."

Niels Frederiksen, CEO, STG

“In the current environment, I’m pleased with our performance for the third quarter, delivering solid cash flows and positive EPS growth, which is in line with our financial expectations for the full year of 2022,” said STG CEO Niels Frederiksen. “We are driving productivity improvements in the supply chain, an issue we have faced in recent quarters, which continues to be our most important short-term priority.”

“While the supply chain issue and the current economic backdrop continue to be challenging, we are encouraged by the progress we are making on our Rolling Toward 2025 Strategy. Our new superstore in San Antonio is off to a very strong start, and our Growth Incubator completed its second product launch in the third quarter, with early but encouraging results. As the unprecedented inflationary dynamics continue to play out, we will use the offsetting actions at our disposal to manage in the short term and are confident in our ability to deliver on our long-term strategy and value aspirations for our shareholders.”