| Company Announcement No. 10/2018 |
Copenhagen, 17 May 2018
Scandinavian Tobacco Group delivers organic net sales growth of 3.5% and organic EBITDA growth of 1.2% in the first quarter of 2018.
Highlights for the first quarter of 2018
- Reported net sales of DKK 1,285 million (DKK 1,379 million) - organic growth +3.5%
- Reported EBITDA of DKK 196 million (DKK 201 million) - organic growth +1.2%
- Net profit of DKK 88 million (DKK 75 million)
- Free cash flow of DKK -76 million (DKK 48 million)
- Announcement of acquisition of Thompson and Co. of Tampa
For the first quarter of 2018 Scandinavian Tobacco Group A/S delivered net sales of DKK 1,285 million and an adjusted EBITDA of DKK 199 million. Reported numbers are negatively impacted by an unfavourable currency impact mainly driven by USD. Adjusted for currency impact and non-recurring items the quarter delivered a 3.5% organic growth in net sales and 1.2% organic growth in EBITDA. Net profit for the quarter increased by 18% to DKK 88 million while free cash flow was negative at DKK -76 million (DKK 48 million) in accordance with seasonal development. The Q1 performance supports our 2018 full year guidance.
The handmade cigar category delivered an organic growth of 6.8% in net sales with the machine-made cigars category delivering a negative organic growth of 1.0%. The pipe tobacco category delivered negative organic growth of 2.0% while fine-cut tobacco reported negative organic growth of 8.0%. The "Other" category continued to show strong growth delivering a positive organic growth of 18.6%.
CEO Niels Frederiksen says: "We're pleased to see continued improvement in our handmade cigars category as the category is returning to healthy growth rates. The first quarter is traditionally our smallest quarter and the machine-made cigars category was impacted by the new excise structures in France, but overall we are on track to deliver on our full year guidance."
Integration of Thompson and Co. of Tampa (Thompson)
The acquisition of Thompson, a leading online retail cigar business in the US, was announced in Q1 and completed on 2 April 2018 at a total purchase price of USD 65 million including a net working capital adjustment of USD 3 million. The acquisition provides Scandinavian Tobacco Group access to a substantial and attractive customer base and strengthens the company's position in the online retail cigar channel in the US significantly.
"We are proud to welcome our new colleagues in Florida into the STG family and have immediately started the integration of Thompson into the new combined business with our existing US online retailer Cigars International. I am excited about this transaction that will allow us to deliver an unmatched range of premium cigars at the highest level of service to the US consumers." says Mr. Frederiksen.
Conference Call and Webcast
A conference call and webcast will be held on 17 May 2018 at 10:00 AM CET.
Presentation materials will be available online approximately one hour before the webcast on investor.st-group.com.
Dial-in details:
Denmark: +45 35 15 80 49
The UK: +44 (0) 330 336 9105
The US: +1 646 828 8143
Passcode: 3912398
https://edge.media-server.com/m6/p/abgic4pp
For further information, please contact:
For investor enquiries: Torben Sand, Head of Investor Relations, phone: +45 7220 7126 or torben.sand@st-group.com
For media enquiries: Simon Mehl Augustesen, Director of Group Communications, phone: +45 7220 7152 or simon.augustesen@st-group.com
