Company announcement 13/2016 - Scandinavian Tobacco Group A/S - Annual Report 2015: Improved underlying margins and strong ca...
March 10 2016 - 1:00AM
Company Announcement
No. 13/2016
10 March 2016
Annual Report 2015
Improved Underlying Margins and
Strong Cash Flow
Scandinavian Tobacco Group A/S - a world leading
manufacturer of cigars and traditional pipe tobacco - announces its
result for the fourth quarter and full year 2015.
Highlights 2015:
-
Net sales increased by 9.9% to DKK 6,732 million
- organic growth of 0.3%
-
Reported EBITDA increased by 5.9% to DKK 1,247
million - organic growth
in EBITDA of 2.2%
-
Profitability improvement leading to adjusted
EBITDA margin of 20.5% (20.3%)
-
Net profit increased by 4.3% to DKK 668
million
-
Cash flow from operating activities increased by
21.7% to DKK 1,285 million
-
Net sales and EBITDA margin delivered in
accordance with our guidanceWe achieved approx. 10% of the cost
savings which in total are expected to amount to DKK 140 million
annually in 2018 as a result of our optimisation and efficiency
programme initiated in 2015. DKK 225 million of the expected DKK
500 million in inventory reductions by 2018 were achieved during
the year.
-
The Board of Directors proposes an ordinary
dividend per share of DKK 5.00 corresponding to a 17% increase vs.
2014 and a 75% pay-out ratio of the net profit
CEO Niels Frederiksen comments:
"In 2015, we made significant progress in optimising our business
and we plan for more. We report improved organic growth in EBITDA
and improved cash flow. We have increased productivity and
successfully realised synergies from our 2014 acquisition of the
Belgian cigar manufacturer Verellen. Our initiated optimisation and
efficiency programme is expected to deliver tangible cost savings
and working capital improvements. Our financial performance for
2015 supports our expectations for 2016."
Guidance maintained for 2016
Our guidance for 2016 is unchanged. We expect an organic growth in
net sales of 1-3% and an organic growth in EBITDA of 3-5%. Capex is
expected to be approx. DKK 250 million including capex of DKK 100
million related to the implementation of the revised EU Tobacco
Products Directive.
The annual report for 2015 is
available for download on: investor.st-group.com.
Conference Call and
Webcast
A conference call and webcast will be held on 10 March 2016 at
10:00 AM CET.
Presentation materials will be available online
approx. one hour before the meeting on investor.st-group.com.
Dial-in details:
Denmark: |
+45 32 71
16 58 |
The
UK: |
+44 20
3427 1904 |
The
US: |
+1 212
444 0895 |
Passcode: |
8042614 |
Webcast:
http://edge.media-server.com/m/p/8v9cvh6c
For further information, please contact:
For media enquiries:
Kaspar Bach Habersaat, Director of Group Communications, phone: +45
7220 7152 or kaspar.bach@st-group.com.
For investor enquiries:
Torben Sand, Head of Investor Relations, phone: +45 7220 7126 or
torben.sand@st-group.com.
Financial Highlights for Q4 2015
Strong performance in handmade cigars contributed
to organic growth of 2.7%
Net sales increased by 8.4% to DKK 1,767 million (DKK 1,630
million). Organic net sales growth was 2.7% driven by continued
strong net sales development in our handmade cigars category. Net
sales of fine-cut tobacco were negatively impacted by a terminated
distribution agreement for third party products and stock building
on the Danish-German border at the end of 2014.
Gross profit
increased by 2.6% - margins impacted in Q4
In total, gross profit increased by 2.6% to DKK 822 million (DKK
801 million) implying a gross margin of 46.5% (49.1%). The margin
declined due to, in particular, the reversal of certain pension
provisions in the machine-made cigars category which had a positive
effect on Q4 2014.
Gross margin developed positively for handmade
cigars and fine-cut tobacco whereas gross margins decreased for
machine-made cigars and pipe tobacco.
EBITDA margin of
17.4%
Reported EBITDA decreased by 0.5% to DKK 308 million (DKK 310
million). Adjusted EBITDA decreased by 13.3%.
Reported EBITDA margin was 17.4% (19.0%). Adjusted
EBITDA margin was 18.9% (22.5%). The quarter included non-recurring
items of DKK 25.7 million related to incentive plans, restructuring
of management in our US handmade cigars business and preparations
related to the revised EU Tobacco Products Directive.
Reported net profit for the quarter decreased by
2.2% to DKK 174 million (DKK 178 million).
Cash flow
increased by 22.1%
Cash flow from operating activities increased by 22.1% to DKK 389
million (DKK 318 million) driven by reduction in working capital.
Free cash flow amounted to DKK 326 million (DKK 306 million).
Capital expenditures amounted to DKK 64 million
(DKK 63 million).
Scandinavian Tobacco Group - Key
Figures |
|
|
|
DKKm |
2015 |
2014 |
2013 |
|
|
Q4 15 |
Q4 14 |
|
|
|
|
|
|
|
|
Income statement |
|
|
|
|
|
|
|
Net
sales |
6,732 |
6,126 |
5,925 |
|
|
1,767 |
1,630 |
Gross
profit |
3,239 |
2,947 |
2,915 |
|
|
822 |
801 |
EBITDA |
1,247 |
1,177 |
1,175 |
|
|
308 |
310 |
Net
profit |
668 |
640 |
573 |
|
|
174 |
178 |
|
|
|
|
|
|
|
|
Balance sheet |
|
|
|
|
|
|
|
Total
assets |
14,544 |
14,162 |
13,196 |
|
|
14,544 |
14,162 |
Equity |
8,998 |
9,087 |
8,333 |
|
|
8,998 |
9,087 |
Net
interest-bearing debt (NIBD) |
3,011 |
2,698 |
2,808 |
|
|
3,011 |
2,698 |
|
|
|
|
|
|
|
|
Cash flow statement |
|
|
|
|
|
|
|
Cash
flow from operating activities (CFFO) |
1,285 |
1,056 |
745 |
|
|
389 |
318 |
Free
cash flow |
1,057 |
585 |
427 |
|
|
326 |
306 |
|
|
|
|
|
|
|
|
Total
capital expenditures |
236 |
215 |
302 |
|
|
64 |
63 |
|
|
|
|
|
|
|
|
Key ratios |
|
|
|
|
|
|
|
Gross
profit, adjusted 1) |
3,282 |
2,947 |
2,915 |
|
|
822 |
801 |
EBITDA, adjusted 1) |
1,385 |
1,247 |
1,198 |
|
|
334 |
367 |
|
|
|
|
|
|
|
|
Net
sales growth |
9.9% |
3.4% |
-0.9% |
|
|
8.4% |
- |
Organic net sales growth 1) + 2) |
0.3% |
2.9% |
0.7% |
|
|
2.7% |
- |
Organic EBITDA growth 1) + 2) |
2.2% |
4.8% |
-5.6% |
|
|
-13.3% |
- |
|
|
|
|
|
|
|
|
Gross
margin |
48.1% |
48.1% |
49.2% |
|
|
46.5% |
49.1% |
Gross
margin, adjusted 1) + 2) |
48.7% |
48.1% |
49.2% |
|
|
46.5% |
49.1% |
EBITDA
margin |
18.5% |
19.2% |
19.8% |
|
|
17.4% |
19.0% |
EBITDA
margin, adjusted 1) + 2) |
20.5% |
20.3% |
20.2% |
|
|
18.9% |
22.5% |
|
|
|
|
|
|
|
|
NIBD /
adjusted EBITDA 1) |
2.2 |
2.2 |
2.3 |
|
|
- |
- |
ROIC
3) |
7.4% |
7.7% |
6.5% |
|
|
- |
- |
ROIC
3, ex. goodwill and trademarks 2010 merger |
13.3% |
13.7% |
11.8% |
|
|
- |
- |
|
|
|
|
|
|
|
|
Dividend per share (DKK) 4) |
14.0 |
4.3 |
3.8 |
|
|
- |
- |
Payout
ratio |
210% |
67% |
67% |
|
|
- |
- |
|
|
|
|
|
|
|
|
1) Adjusted net sales, gross profit and EBITDA are defined
as excluding non-recurring items |
|
|
2) Organic growth rates are defined as growth in adjusted
net sales and EBITDA - excluding currencies and
acquisitions |
3) EBIT / (12 mth average invested capital) |
4) In 2015 an extraordinary dividend was paid of DKK 9.00
per share (DKK 900 million) |
Key Data Per Category |
|
|
|
|
|
|
|
|
2015 |
2014 |
2013 |
|
|
Q4 15 |
Q4 14 |
|
|
|
|
|
|
|
|
Net sales (DKKm) |
|
|
|
|
|
|
|
Handmade cigars |
1,935 |
1,514 |
1,368 |
|
|
497 |
407 |
Machine-made cigars |
2,702 |
2,595 |
2,513 |
|
|
711 |
710 |
Pipe
tobacco |
629 |
569 |
567 |
|
|
170 |
140 |
Fine-cut tobacco |
583 |
562 |
522 |
|
|
144 |
155 |
Other |
882 |
886 |
956 |
|
|
245 |
219 |
Group total |
6,732 |
6,126 |
5,925 |
|
|
1,767 |
1,630 |
|
|
|
|
|
|
|
|
Gross profit (DKKm) |
|
|
|
|
|
|
|
Handmade cigars |
843 |
656 |
603 |
|
|
217 |
174 |
Machine-made cigars |
1,372 |
1,341 |
1,362 |
|
|
354 |
392 |
Pipe
tobacco |
378 |
340 |
333 |
|
|
91 |
83 |
Fine-cut tobacco |
342 |
300 |
274 |
|
|
76 |
79 |
Other |
304 |
310 |
342 |
|
|
84 |
74 |
Group total |
3,239 |
2,947 |
2,915 |
|
|
822 |
801 |
|
|
|
|
|
|
|
|
Organic net sales growth (%) |
|
|
|
|
|
|
|
Handmade cigars |
7.9% |
9.6% |
2.3% |
|
|
7.0% |
- |
Machine-made cigars |
-2.3% |
2.2% |
-2.6% |
|
|
-1.1% |
- |
Pipe
tobacco |
1.6% |
0.5% |
5.4% |
|
|
14.6% |
- |
Fine-cut tobacco |
-1.3% |
8.8% |
7.3% |
|
|
-10.6% |
- |
Other |
-4.5% |
-6.6% |
1.2% |
|
|
8.9% |
- |
Group total |
0.3% |
2.9% |
0.7% |
|
|
2.7% |
- |
|
|
|
|
|
|
|
|
Volume impact (%) |
|
|
|
|
|
|
|
Handmade cigars |
6.6% |
7.3% |
-3.0% |
|
|
10.1% |
- |
Machine-made cigars |
-5.7% |
-0.6% |
-4.2% |
|
|
-4.0% |
- |
Pipe
tobacco |
-5.1% |
-3.1% |
1.5% |
|
|
9.9% |
- |
Fine-cut tobacco |
-6.0% |
1.1% |
0.7% |
|
|
-16.9% |
- |
Other |
- |
- |
- |
|
|
- |
- |
Group total |
- |
- |
- |
|
|
- |
- |
|
|
|
|
|
|
|
|
Price/Mix impact (%) |
|
|
|
|
|
|
|
Handmade cigars |
1.3% |
2.3% |
5.3% |
|
|
-3.0% |
- |
Machine-made cigars |
3.4% |
2.8% |
1.6% |
|
|
2.9% |
- |
Pipe
tobacco |
6.7% |
3.6% |
3.9% |
|
|
4.7% |
- |
Fine-cut tobacco |
4.7% |
7.7% |
6.6% |
|
|
6.2% |
- |
Other |
- |
- |
- |
|
|
- |
- |
Group total |
- |
- |
- |
|
|
- |
- |
|
|
|
|
|
|
|
|
Gross margin (%) |
|
|
|
|
|
|
|
Handmade cigars |
43.6% |
43.3% |
44.1% |
|
|
43.7% |
42.7% |
Machine-made cigars 1) |
50.8% |
51.7% |
54.2% |
|
|
49.8% |
55.2% |
Pipe
tobacco |
60.1% |
59.8% |
58.8% |
|
|
53.6% |
59.5% |
Fine-cut tobacco |
58.5% |
53.4% |
52.5% |
|
|
52.8% |
51.1% |
Other |
34.5% |
35.0% |
35.8% |
|
|
34.2% |
33.5% |
Group total 1) |
48.1% |
48.1% |
49.2% |
|
|
46.5% |
49.1% |
1) 2015 incl. non-recurring items of DKK
-43.7m in gross profit and DKK -6.9m in net sales. Adjusted gross
margin is 52.2% (machine-made cigars) and 48.7% (Group) |
|
|
Adjustments
to Net Sales, Gross Profit and EBITDA |
|
|
|
|
DKKm |
2015 |
2014 |
2013 |
|
|
Q4 15 |
Q4 14 |
Net sales |
|
|
|
|
|
|
|
Reported |
6,732 |
6,126 |
5,925 |
|
|
1,767 |
1,630 |
Non-recurring items |
7 |
0 |
0 |
|
|
0 |
0 |
Net sales, adjusted |
6,739 |
6,126 |
5,925 |
|
|
1,767 |
1,630 |
|
|
|
|
|
|
|
|
Gross profit |
|
|
|
|
|
|
|
Reported |
3,239 |
2,947 |
2,915 |
|
|
822 |
801 |
Non-recurring items |
44 |
0 |
0 |
|
|
0 |
0 |
Gross profit, adjusted |
3,282 |
2,947 |
2,915 |
|
|
822 |
801 |
|
|
|
|
|
|
|
|
EBITDA |
|
|
|
|
|
|
|
Reported |
1,247 |
1,177 |
1,175 |
|
|
308 |
310 |
Non-recurring items |
138 |
69 |
24 |
|
|
26 |
57 |
EBITDA, adjusted |
1,385 |
1,247 |
1,198 |
|
|
334 |
367 |
|
|
|
|
|
|
|
|
About
Scandinavian Tobacco Group
Scandinavian Tobacco Group A/S with its subsidiaries (the
"Group") is a world leading producer of cigars
and traditional pipe tobacco. The Group also produces fine-cut
tobacco and sells tobacco-related accessories. The Group produces
and sells 3 billion cigars and 5,000 tonnes of pipe and fine-cut
tobacco annually. Scandinavian Tobacco Group believes it is the
only company globally with a core strategic focus on production and
distribution in all of these tobacco categories.
Scandinavian Tobacco Group holds market-leading positions in the
machine-made cigar market in Europe, the handmade cigar market in
the US, the online and catalogue retail sales of cigars in the US,
the traditional pipe tobacco market globally and in selected
fine-cut tobacco markets.
Scandinavian Tobacco Group has a diversified portfolio of more than
200 brands providing a complementary range of established global
brands and local champions. In the cigar segment, the brand
portfolio comprises Café Crème, La Paz, Macanudo, CAO, Partagas
(US) and Cohiba (US). Pipe tobacco brands include Captain Black,
Erinmore, Borkum Riff and W.Ø. Larsen, while leading fine-cut
tobacco brands include Bugler, Break, Escort, Bali Shag and
Tiedemanns.
As at 31 December 2015, the Group employed approx. 8,100 people in
the Dominican Republic, Honduras, Nicaragua, Indonesia, Europe, New
Zealand, Australia, Canada and the US.
For more information please visit www.st-group.com.
Scandinavian Tobacco Group A/S
Sydmarken 42
DK-2860 Søborg
Denmark
CVR 31 08 01 85
Annual Report 2015
Press release (PDF)
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Scandinavian Tobacco Group A/S via
Globenewswire
HUG#1993241
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