Scandinavian Tobacco Group A/s · OMXCOP:STG
Scandinavian Tobacco Group A/s — FY2021 Earnings Presentation
23 slides from Scandinavian Tobacco Group A/s's earnings presentation, Mar 8, 2022
Slide 1: Investor Presentation Full Year 2021
INVESTOR PRESENTATION FULL YEAR 2021 8 MARCH 2022
Slide 2: Agenda
AGENDA 1 FY/Q4 2021 Highlights 2 Sustainability, One Process and Regulation NIELS FREDERIKSEN 3 Our 3 divisions CEO 4 Financials and Capital Allocation 5 Guidance 2022 MARIANNE RØRSLEV BOCK CFO 6 Q&A session All statements except for statements of historical fact in this presentation are forward-loo
Slide 3: FY/Q4 2021 Highlights
FY/Q4 2021 HIGHLIGHTS • Financial performance reflects continued strength in most business segments • FY 2021: Organic net sales growth of 4.5%, organic EBITDA growth of 18.4%, FCF before acquisitions DKK 1.4bn • Q4 2021: Organic net sales growth of 1.8%, organic EBITDA growth of 14.2%, FCF before a
Slide 4: Sustainability, One Process and Regulation
SUSTAINABILITY, ONE PROCESS AND REGULATION
Slide 5: Sustainability Achievements 2021
SUSTAINABILITY COMMITMENT NEW STRATEGY ACHIEVEMENTS 2021 We will present a new and upgraded sustainability strategy in the first half of 2022 INVESTMENT IN 2022 We are committing DKK 10-20 million in -3.7% -3.1% -3.4% 2022 to the ramp-up of our sustainability initiatives. Group-wide CO2 Water use in
Slide 6: Regulation
REGULATION Decades of experience adapting to the changing # global regulatory landscape Successful implementation of diverse # regulations REGULATORY UPDATES 1 US: Flavourised tobacco products 2 EU: Excise Directive Revision Update 3 EU: Tobacco Products Directive Revision Update 4 EU: Plastics 6
Slide 7: One Process Update
ONE PROCESS UPDATE # Professionalise and simplify the business Exchange of 12 ERP systems into One Global # System ONE PROCESS UPDATE 1 2021 Clarification Phase Completed Total Investments Revised to DKK 600-700 million 2 (from DKK 280-340 million) in 2022-2025 3 Annual benefits expected to reach DK
Slide 8: Our Divisions
OUR DIVISIONS
Slide 9: Europe Branded Highlights Q4 2021
EUROPE BRANDED HIGHLIGHTS Q4 2021 • Organic net sales growth -2% as a result of the termination of a distribution agreement • Market developments have started to normalise with volume declines mostly offset by price increases • The combined volume market share index declined to 31.5% in Q4 2021 (33.
Slide 10: Europe Branded Looking Ahead
EUROPE BRANDED LOOKING AHEAD • Structural decline rate in machine-rolled cigar volumes now expected at about -3% versus previously negative 3-5% • Focus on market shares and price improvements to secure sustainable flat to slightly increasing organic net sales growth • Remaining benefits from the in
Slide 11: North America Online & Retail Highlights Q4 2021
NORTH AMERICA ONLINE & RETAIL HIGHLIGHTS Q4 2021 • Consumption of handmade cigars has remained strong in the fourth quarter of the year • 1% negative organic net sales growth driven by a negative contribution from online partly off- set by strong growth in retail • Active customer file down 7% in th
Slide 12: North America Online & Retail Looking Ahead
NORTH AMERICA ONLINE & RETAIL LOOKING AHEAD • Increase in consumption of handmade cigars in the US since the outbreak of the pandemic is expected to be sustainable. Assumed long-term volume trend at around -1% per year, expected to be more than offset by price increases • Expectation that channel sh
Slide 13: North America Branded & RoW Highlights Q4 2021
NORTH AMERICA BRANDED & ROW HIGHLIGHTS Q4 2021 • Strong organic net sales growth driven by volume growth in the cigar categories, primarily machine-rolled cigars in the US and handmade cigars in International Markets as well as in Accessories & CMA • Handmade cigars in the US did also deliver positi
Slide 14: North America Branded & RoW Looking Ahead
NORTH AMERICA BRANDED & ROW LOOKING AHEAD • The consumption of handmade cigars is expected to resume to its structural trend of an approx. 1% annual volume decline from the current level • With a combination of strategic initiatives like the launch of The Forged Cigar Company, price increases a.o.,
Slide 15: Group Financials and Capital Allocation
GROUP FINANCIALS AND CAPITAL ALLOCATION
Slide 16: Q4 2021 Results
Q4 2021 RESULTS Q4 Q4 FY FY Q4 2021 (Q4 2020) DKK million 2021 2020 2021 2020 1.8% Organic net sales growth (4.2%) Net sales 2,012 1,922 8,233 8,006 49.0% Gross margin (45.1%) Gross profit (before special items) 985 867 4,113 3,712 25.4% OPEX ratio (24.5%) OPEX -512 -470 -1,911 -1,886 EBITDA before
Slide 17: Net Debt and Leverage
NET DEBT AND LEVERAGE • Net Interest-bearing Debt (NIBD) has decreased marginally by DKK 8 million versus year-end 2020 as capital allocations has offset cash-flow generation from operations • Leverage ratio decreased to 1.5x EBITDA versus 1.6x by end of Q3 2021 and 1.8x by year-end 2020 • Decrease
Slide 18: Dividends
DIVIDENDS • Shareholder Return Policy with ambition of annual growth in ordinary dividend payments • Number of outstanding shares was reduced by 2.5% in April 2021 to 97.5 million shares • Proposal to reduce number of outstanding shares by another 4.6% to 93.0 million shares at AGM 31 March 2022 • P
Slide 19: Capital Distribution
CAPITAL DISTRIBUTION TOTAL CAPITAL ALLOCATION 2016-2021 OF DKK 4.6 BILLION • Share buy-back programme of DKK 600 million was completed in February 2022. DKK 97 million purchased since year-end 2021 • Total capital distribution in 2021 of DKK 1,233 million versus DKK 805 million in 2020 – an 55% incr
Slide 20: Guidance 2022
GUIDANCE 2022
Slide 21: Full Year 2022 Guidance
FULL YEAR 2022 GUIDANCE Organic EBITDA Growth 0%-6% FCF before acquisitions DKK 1.1-1.4 billion Adjusted Earnings Per Share >5% increase FINANCIAL ASSUMPTIONS 1 Agio cost savings ~DKK 50 million 2 Financial expenses, excl. forex DKK 100-110 million 3 Special items ~DKK -200 million 4 Capital expendi
Slide 22: Questions and Answers
QUESTIONS AND ANSWERS https://investor.st-group.com 22
Slide 23: Event Calendar & Contact
EVENT CALENDAR & CONTACT EVENT CALENDAR 2022 8 MAR 31 MAR 19 MAY 24 AUG 9 NOV FY/Q4 Annual Q1 H1/Q2 Q3 2021 General Interim Interim Interim Meeting INVESTOR RELATIONS CONTACT Scandinavian Tobacco Group A/S Torben Sand Sandtoften 9 Head of Investor Relations 2820 Gentofte Tel: +45 5084 7222 Denmark t
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