Tag: Scandinavian Tobacco Group

  • Strong Quarter for Scandinavian Tobacco

    Strong Quarter for Scandinavian Tobacco

    Photo: STG

    Scandinavian Tobacco Group (STG) delivered better-than-expected results with growth in net sales, earnings and free cash flow before acquisitions. The results were driven by increased consumption of handmade cigars and a strong volume growth in the U.S. online business.

    Net sales grew organically by 4.6 percent to DKK2.1 billion ($335.7 million). EBITDA before special items was DKK489 million after 19.1 percent organic growth. The EBITDA margin was 23.3 percent. Agio Cigars, which was acquired on January 2, 2020, contributed as planned.

    In the first 6 months of 2020, net sales grew 4.9 percent organically to DKK3.8 billion, and EBITDA before special items grew 21 percent organically to DKK815 million.

    The negative impact of the Covid-19 pandemic on STG’s business has been less profound than the company anticipated earlier in the year. According to STG, tobacco consumption across markets and categories has displayed significant resilience and increased consumption of handmade cigars brought on by the change in consumer behavior in the U.S. is likely to continue for the rest of the year.

    Niels Frederiksen

    While visibility around the financial outlook remains lower than normal and financial performance in the quarter was positively impacted by phasing in certain markets, the group raised its 2020 full-year guidance on Aug. 14  based on the year-to-date numbers, a strong performance in the month of July, a successful initial integration of Agio Cigars and assuming no material disruptions to the group’s supply-chain.

    “Our strong performance in the quarter is based on an overall increased consumption of handmade cigars in the U.S. as more people work from home and by the skills and hard work of our employees around the world who have been working diligently to mitigate the impacts of the pandemic and keep the business moving forward,” said STG CEO Niels Frederiksen in a press release. “Additionally, a successful initial integration of Agio Cigars and the continued execution of ‘Fueling the Growth’ are also positively affecting our cost efficiency in the quarter.”  

  • STG Changes Financial Reporting Structure

    STG Changes Financial Reporting Structure

    Photo: STG

    To increase speed to market and unlock synergies, Scandinavian Tobacco Group on May 19, 2020, announced a new organizational structure with three new commercial divisions. To align financial reporting with the new organizational structure and ensure consistency with internal management reporting, the group has now revised its external reporting structure accordingly.
     
    The three divisions are North America Online & Retail, North America Branded & Rest of World and Europe Branded.
     
    Division North America Online & Retail includes direct-to-consumer sales of all product categories sold via the online, catalogue and retail channel in North America.
     
    Division North America Branded & Rest of World includes sales of all product categories to wholesalers and distributors that supply retail in the United States, Canada, Australia, New Zealand, international sales (Norway, Finland, Switzerland, Israel and Russia), Asia, global travel retail and contract manufacturing for third parties.
     
    Division Europe Branded includes sales of all product categories to wholesalers and distributors that supply retail in Germany, Denmark, Sweden, France, Italy, Belgium, the Netherlands, Luxembourg, Spain, Portugal as well as the United Kingdom and Ireland.

    STG recently raised its full-year guidance. The group will announce its 2020 second quarter results Aug. 28, 2020. 

  • Scandinavian Tobacco Raises its Guidance

    Scandinavian Tobacco Raises its Guidance

    Photo: STG

    Scandinavian Tobacco Group (STG) has raised its full year guidance. According to STG, the negative impact of the Covid-19 pandemic on the company’s business has been less profound than anticipated earlier in the year as tobacco consumption across markets and categories has displayed significant resilience.

    “The current change in consumer behavior in the U.S. as more people work from home has resulted in a likely overall increased consumption of handmade cigars and a strong growth in the online business,” the company wrote in a statement.

    “Combined with a stronger-than-anticipated resilience in sales volumes of machine-made cigars and smoking tobacco—and a continued strong internal cost focus—Scandinavian Tobacco Group can for the first six months of 2020 present 4.9 percent organic growth in net sales, 21 percent organic growth in EBITDA and a free cash flow before acquisitions of DKK547 million ($86.76 million).”

    According to STG, financial performance also remains positively impacted by phasing in certain markets, which will affect the results in the second half of the year. “While visibility around the financial outlook remains lower than normal it is expected that the change in consumer behavior in the U.S. will continue for the rest of the year,” STG stated.

    Based on the year-to-date numbers including a strong performance in the month of July, a successful initial integration of Agio Cigars and assuming no material disruptions to our supply-chain, the group has revised its full-year guidance as follows: EBITDA organic growth of more than 9 percent (previously: 2 percent-plus); and free cash flow before acquisitions: more than DKK1 billion (previously: about DKK850 million)

    STG will announce its second-quarter results on Aug. 28, 2020.