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Scandinavian Tobacco Group A/S: Interim report, 1 January-30 September 2020

Scandinavian Tobacco Group A/S
·3-min read

Company Announcement
No. 37/2020

Copenhagen, 5 November 2020

Interim report, 1 January-30 September 2020

Scandinavian Tobacco Group A/S reports Q3 results

For the third quarter of 2020, Scandinavian Tobacco Group delivered continued positive growth in net sales, earnings and free cash flow before acquisitions. The strong results were driven by positive developments in the important US market with overall increased consumption of handmade cigars and strong volume growth in the online business.

Q3 2020 highlights

  • Net sales grew to DKK 2,231 million (DKK 1,808 million) with 12.0% organic growth.

  • EBITDA before special items was DKK 614 million (DKK 446 million) after 32.5% organic growth. The EBITDA margin was 27.5% (24.7%).

  • Earnings Per Share (EPS) was DKK 4.2 (DKK 2.6) adjusted for special items.

  • Free cash flow before acquisitions improved to DKK 609 million (DKK 503 million).

  • STG issued a EUR 300 million unsecured corporate bond.

  • Share repurchases of DKK 53 million out of DKK 300 million program

  • In the first nine months of 2020, net sales grew 7.5% organically to DKK 6,084 million (DKK 5,020 million), and EBITDA before special items grew 25.6% organically to DKK 1,429 million (DKK 1,083 million). Free cash flow before acquisitions improved to DKK 1,156 million (DKK 819 million).

Increased tobacco consumption across markets and categories
The changes in consumer behaviour following the outbreak of the Covid-19 pandemic in the second quarter of 2020 have continued with high tobacco consumption across product categories and markets. In addition to increasing demand for handmade cigars in the US, sales of pipe tobacco and fine cut tobacco have performed better in several markets. The financial performance continues to be positively impacted by phasing.

The increased cigar consumption in the US is expected to continue in the near term. However, the Group’s financial performance in the fourth quarter is expected to be negatively impacted by the loading of net sales in previous quarters and very strong comparison numbers partly driven by the change in sales taxing in France in the fourth quarter 2019. Furthermore, despite positive impacts from efficiency improvements and the integration of Agio Cigars a temporary increase is expected in the OPEX ratio driven by strategic sales and marketing initiatives. The financial outlook for 2020 is maintained.

  • EBITDA: Organic growth >9%

  • Free cash flow before acquisitions: >DKK 1,000 million

CEO Niels Frederiksen: “We are able to present a very strong result for the third quarter with double-digit growth in net sales, EBITDA and cash flow – and overall our performance in the first nine months of 2020 has been better than anticipated. However, we maintain our guidance for the full year as we expect our financial performance in the fourth quarter to be negatively impacted by phasing, a temporary increase in the OPEX ratio and strong comparisons numbers.”

For further information, please contact:
Investors: Torben Sand, Head of IR, phone +45 5084 7222 or

Media: Simon Mehl Augustesen, Director of Group Communications, phone: +1 484-379-8725 or

A conference call will be held on 5 November 2020 at 10.00 CEST. Dial-in information and an accompanying presentation will be available at around 09:00 CEST.