Scandinavian Tobacco Group A/S delivered net sales of DKK 1.646 million (USD 242,441) and EBITDA (Earnings before interest, taxes, depreciation and amortization) before special items of DKK 446 million (USD 65.69 million) in the third quarter of 2019, according to the report.
For Q3, STG reported a positive organic growth in EBITDA of 5.4 per cent, which was up by 1.9 per cent and believed to be pushed by Region Smoking Tobacco & Accessories as well as North America Branded. Organic growth in net sales was negative by 4.5 per cent driven by all divisions, mentions the report. In the first 9 months of 2019 the company reported negative organic net sales growth of 2.4 per cent and an organic EBITDA growth of 5.8 per cent, which generated a free cash flow before acquisitions of DKK 819 million (USD 120.63 million) and an EPS of DKK 4.7 (USD 0.69).
STG also agreed the terms and conditions for the acquisition of Royal Agio Cigars which in combination with the closure of the Group’s Lane Ltd. facility in the US results in a full-year guidance for free cash flow of DKK 1 billion (USD 147 million) up from DKK 750 million (110.47 million).
CEO of Scandinavian Tobacco Group Niels Frederiksen said: “In the third quarter of the year we deliver organic EBITDA growth of 5.4%, continued margin improvements and a strong free cash flow despite a disappointing development in organic net sales. This follows better than expected progress from our transformational program Fuelling the Growth and continued cash flow focus across our business. During the quarter we were also able to announce our intention to acquire Royal Agio Cigars; a significant step in support of our ambition to become the undisputed leader in cigars and pipe tobacco.”
Scandinavian Tobacco Group expects the development in organic net sales to remain weak in the fourth quarter of 2019.