Scandinavian Tobacco Group A/S: Full-year report, 1 January - 31 December 2023
March 05 2024 - 10:40AM
Scandinavian Tobacco Group A/S: Full-year report, 1 January - 31
December 2023
Company Announcement No. 12/2024
Copenhagen, 5 March 2024
Full-year report, 1 January - 31
December 2023 Scandinavian Tobacco Group Reports
Full Year 2023 Results and Proposes DKK 8.4 in Dividend Per
Share
For the full year of 2023, Scandinavian Tobacco
Group A/S (“the Group” or “Scandinavian Tobacco Group”) delivered
net sales of DKK 8.7 billion, an EBITDA margin of 24.1%, a free
cash flow before acquisitions of DKK 1.1 billion and an adjusted
EPS of DKK 14.4. The financial results were in line with
expectations for the year.
For the fourth quarter of 2023, net sales were
DKK 2.3 billion with an EBITDA margin before special items at
22.7%. Organic growth of 5% for net sales was driven by the Group’s
Growth Enablers, which in the fourth quarter accounted for close to
10% of Group net sales, as well as an improved performance in the
machine-rolled cigar business in Europe. The EBITDA margin was as
expected, impacted by increased investments.
For the full year of 2024, net sales and EBITDA
margin before special items are expected in the range of DKK
8.8-9.1 billion and 22-24%, respectively with free cash flow before
acquisition expected in the range of DKK 0.8-1.0 billion reflecting
that, we will actively pursue the multiple opportunities of
expansion by further increasing our investments to deliver long
term sustainable net sales and profit growth.
Q4 Highlights
- Net sales of DKK
2,275 million (DKK 2,185 million) with 5% organic growth.
- EBITDA before
special items was DKK 517 million (DKK 563 million) with an EBITDA
margin of 22.7% (25.8%).
- Adjusted Earnings
Per Share (EPS) were DKK 3.6 (DKK 4.4).
- Free cash flow
before acquisitions was DKK 452 million (DKK 530 million).
- Return on Invested
Capital (ROIC) was 11.4% (14.3%).
- For the full year of
2023, organic net sales growth was 0.3% with net sales at DKK 8,731
million (DKK 8,762 million), and the EBITDA margin was 24.1%
(25.9%) with free cash flow before acquisitions at DKK 1,053
million (DKK 1,264 million).
CEO Niels Frederiksen: “ Despite a challenging
consumer environment STG delivered solid results for 2023 due to
the commitment and performance of our employees across the globe.
We continued to execute well on our strategy with two acquisitions,
and I am particularly happy to see the progress in our Growth
Enablers, where we saw healthy growth in international handmade
cigars, retail expansion and Next Generation Products. As we move
into 2024, we are increasing our investments in the Growth Enablers
and we expect 2024 to be a year of growth for STG.”
Capital Allocation
At the Annual General Meeting on 4 April 2024, the Board of
Directors will propose an increase in the ordinary dividend of 2%
to DKK 8.40 per share complementing the up to DKK 850 million share
buy-back programme, which was launched in November 2023.
Financial Guidance 2024
The Group reported net sales are expected in the
range of DKK 8.8-9.1 billion (2023: DKK 8.7 billion). All three
commercial divisions are expected to deliver growth in net sales
compared to 2023 with the highest growth in Europe Branded driven
by increasing sales of NGPs and pricing in the core categories. The
Growth Enablers are expected to increase to a level of 10% of Group
net sales in 2024.
The EBITDA margin before special items is
expected in the range of 22-24% (2023: 24.1%). The margin is being
diluted by increased investments in our Growth Enablers. Cost
inflation and mix changes are partly offset by price increases and
continued cost optimisations which will benefit coming years.
The largest uncertainties for net sales and the
EBITDA margin remain changes in consumer behaviour and in market
and/or product mix as well as unexpected cost inflation.
Free cash flow before acquisitions is expected
in the range of DKK 0.8-1.0 billion and will be impacted by up to
DKK 300 million in special investments.
- Net sales in the range of DKK 8.8-9.1 billion
- EBITDA margin before special items in the range of 22%-24%
- Free cash flow before acquisitions in the range DKK 0.8-1.0
billion
- Adjusted EPS in the range of DKK 12.5-14.5
The Annual Report for 2023 is available
for download at: investor.st-group.com.
For further
information, please contact:Torben Sand, Head of IR &
Communication, phone +45 5084 7222 or torben.sand@st-group.comEliza
Dabbagh, IR and Communication, phone +45 5080 7619 or
eliza.michael@st-group.com
A conference call will be held on 6 March 2024
at 10.00 CEST. Dial-in information and an accompanying presentation
will be available at investor.st-group.com/investor around 09:00
CEST.
- STG Annual Report 2023
- Interim report Q4 2023
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