Scandinavian Tobacco Group A/s · OMXCOP:STG
Scandinavian Tobacco Group A/s — Q2 2024 Earnings Presentation
30 slides from Scandinavian Tobacco Group A/s's earnings presentation, Aug 23, 2024
Slide 1: Creating Moments of Enjoyment
CREATING MOMENTS OF ENJOYMENT Investor Presentation | Second Quarter 2024 Results | 22 August 2024
Slide 2: A Global Leader in Cigars: Corporate Summary
Q2 2024 RESULTS A GLOBAL LEADER IN CIGARS CORPORATE SUMMARY* • 200 LEADING BRANDS, 11 PRODUCTION SITES • NO. 1 HANDMADE CIGAR PLAYER IN USA Market cap Share price Shares Outstanding • NO. 1 MACHINE-ROLLED CIGAR PLAYER IN EUROPE DKK 8.4 billion DKK 102 82.1 million • ALMOST 1 MILLION ONLINE CUSTOMERS
Slide 3: Agenda
Q2 2024 RESULTS AGENDA Q2 2024 Highlights Niels Frederiksen, Chief Executive Officer Strategy Update and Key Events Niels Frederiksen, Chief Executive Officer Core Markets Update and Product Categories NIELS FREDERIKSEN MARIANNE RØRSLEV BOCK Regis Broersma, Chief Commercial Officer Chief Executive O
Slide 4: Q2 2024 Highlights: Strategy Update
Q2 2024 HIGHLIGHTS STRATEGY UPDATE NIELS FREDERIKSEN, CEO
Slide 5: Q2/H1 2024 Highlights
Q2 2024 RESULTS Q2/H1 2024 HIGHLIGHTS Q2 2024 Q2 2023 • Second quarter performance support full year expectations • Organic net sales growth of 4.8% (Q2) and 1.5% (H1) Net Sales Growth 6.3% -2.3% • EBITDA-margin recovering following weak first quarter EBITDA margin before special items 24.5% 23.1% G
Slide 6: Strategy Update and Other Key Events
Q2 2024 RESULTS STRATEGY UPDATE AND OTHER KEY EVENTS Acquisition of Mac Baren PURPOSE CRAFT THE RITUALS THAT MAKE US MORE strengthens STG in multiple aspects VISION BE THE UNDISPUTED & SUSTAINABLE GLOBAL LEADER IN CIGARS AMBITION LARGER COMPANY GROWING OUTSTANDING Staying fit for the future EBITDA M
Slide 7: Mac Baren Tobacco Company A/S
Q2 2024 RESULTS MAC BAREN TOBACCO COMPANY A/S A VALUE ADDING BOLT-ON ACQUISITION • Smoking Tobacco and Next Generation Products • Strong portfolio of brands within pipe tobacco and fine-cut tobacco • NGP business include the brands Ace and Gritt and production capacity in Svendborg, Denmark • Report
Slide 8: Core Markets Update & Product Categories
Q2 2024 HIGHLIGHTS CORE MARKETS UPDATE & PRODUCT CATEGORIES REGIS BROERSMA, CCO
Slide 9: Stronger Category & End-Market Focus
Q2 2024 RESULTS STRONGER CATEGORY & END-MARKET FOCUS 3 CATEGORIES 4 SALES CLUSTERS SHARPER FOCUS IMPACT Handmade Cigars Online & Retail Faster decision making Core Priorities Machine-Rolled Cigars North America Branded Stronger performance culture & Smoking Tobacco Must-Win Battles & Rest of the Wor
Slide 10: Product Category Performance
Q2 2024 RESULTS PRODUCT CATEGORY PERFORMANCE Share of Q2 2024 Organic Growth (%) Group Net sales (%) Handmade Cigars 37% 3% MRC and Smoking Tobacco 46% -2% Next Generation Products 6% >100% Other* 11% 10% Group 100% 5% * Other includes Accessories, Contract Manufacturing, Bar Sales a.o. 10
Slide 11: Cigar Market Trends
Q2 2024 RESULTS CIGAR MARKET TRENDS Handmade Cigars Machine-Rolled Cigars 11
Slide 12: Handmade Cigars
Q2 2024 RESULTS HANDMADE CIGARS • Reported net sales growth in Q2 2024 at 4% driven by international markets and our super stores in the US • Consumption of handmade cigars in the US estimated to decline by a mid-single digit percentage in H1 with recovery in the short-term unlikely • Online net sal
Slide 13: Machine Rolled Cigars & Smoking Tobacco
Q2 2024 RESULTS MACHINE ROLLED CIGARS & SMOKING TOBACCO • Total market decline in our core European markets continued at mid-single digit rates in the second quarter with major markets like the UK and France declining more than average • The market share index has declined as a combination of own pe
Slide 14: Next Generation Products
Q2 2024 RESULTS NEXT GENERATION PRODUCTS • Our own brands accounted for about 3% of group net sales in Q2 2024 with high double digit like-for-like growth rates • Sweden: XQS market share increasing to about 7%. • UK: Launch of XQS off to a good start • Launching in other markets during the second h
Slide 15: Divisions & Group Financials
Q2 2024 HIGHLIGHTS DIVISIONS & GROUP FINANCIALS MARIANNE BOCK, CFO
Slide 16: Europe Branded
Q2 2024 RESULTS EUROPE BRANDED 800 NET SALES 10% 600 5% Q2 2024 Highlights 400 0% • 6% organic net sales growth driven by NGP, Handmade Cigars and Smoking Tobacco 200 -5% • Machine-Rolled Cigars delivered 4% negative organic growth 0 -200 -10% • Reported net sales, including the impact from the acqu
Slide 17: North America Branded & ROW
Q2 2024 RESULTS Q2 2024 RESULTS NORTH AMERICA BRANDED & ROW 1,000 NET SALES 0% Q2 2024 Highlights 750 • 4% negative organic net sales growth driven by negative volumes in Machine-Rolled 500 -5% Cigars, partly explained by phasing of volumes in Middle East/Africa as well as lower 250 volumes of Handm
Slide 18: North America Online & Retail
Q2 2024 RESULTS NORTH AMERICA ONLINE & RETAIL 1000 NET SALES Q2 2024 Highlights 13% 750 10% • 12% organic net sales growth driven by the distribution of third party NGP products, 8% retail stores and pricing of handmade cigars. Reported net sales increased by almost 500 14% including a positive impa
Slide 19: Long Term Trend - EBITDA Margins Q2 2018-Q2 2024
Q2 2024 RESULTS LONG TERM TREND - EBITDA MARGINS Q2 2018-Q2 2024 THE GROUP NAOR % % 30 25 20 20 15 10 10 5 0 0 Q2 18 Q2 19 Q2 20 Q2 21 Q2 22 Q2 23 Q2 24 Q2 18 Q2 19 Q2 20 Q2 21 Q2 22 Q2 23 Q2 24 % EUROPE BRANDED % NABROW 30 50 40 20 30 20 10 10 0 0 Q2 18 Q2 19 Q2 20 Q2 21 Q2 22 Q2 23 Q2 24 Q2 18 Q2
Slide 20: Q2 and 6M 2024 Results
Q2 2024 RESULTS Q2 AND 6M 2024 RESULTS DKK million Q2 2024 Q2 2023 6M 2024 6M 2023 FY 2023 FY 2022 Net sales 2,366 2,225 4,314 4,188 8,731 8,762 Gross profit (before special items) 1,109 1,044 1,990 2,023 4,204 4,307 OPEX -545 -530 -1,095 -1,036 -2,111 -2,037 Other income 16 0 19 0 12 0 EBITDA befor
Slide 21: Q2 and 6M 2024 Key KPIs
Q2 2024 RESULTS Q2 AND 6M 2024 KEY KPI’S DKK million Q2 2024 Q2 2023 6M 2024 6M 2023 FY 2023 FY 2022 Organic net sales growth 4.8% -1.8% 1.5% -1.3% 0.3% -0.8% Gross margin 46.9% 46.9% 46.1% 48.3% 48.2% 49.2% OPEX ratio 23.0% 23.8% 25.4% 24.7% 24.2% 23.3% EBITDA margin 24.5% 23.1% 21.2% 23.6% 24.1% 2
Slide 22: Net Debt and Leverage
Q2 2024 RESULTS NET DEBT AND LEVERAGE NIBD AND LEVERAGE 6,000 3.5 • Net Interest-bearing Debt (NIBD) increased by DKK 1.3 5,364 billion versus the end of 2023 to DKK 5.4 billion. Compared 5,059 with the end of the first quarter, the increase was close to 5,000 3.0 DKK 0.9 billion. 4,057 4,000 • The
Slide 23: Shareholder Returns
Q2 2024 RESULTS SHAREHOLDER RETURNS CAPITAL DISTRIBUTION • Shareholder Return Policy with ambition of annual growth in ordinary 1,600 dividend payments and distributing excess capital 1,200 • More than DKK 1.2 billion returned YTD in 2024 800 • Execution of up to DKK 850 million programme (Nov23-Feb
Slide 24: Outlook & Financial Expectations 2024
Q2 2024 OUTLOOK & FINANCIAL EXPECTATIONS 2024 NIELS FREDERIKSEN, CEO
Slide 25: Outlook
Q2 2024 RESULTS OUTLOOK WITH ROLLING TOWARDS 2025 - WE AIM TO BUILD A LARGER AND MORE PROFITABLE COMPANY • Core categories to deliver flat to low single digit annual net sales growth, though near-term volatility remain high • We adapt to fast changing consumer behavior and take action should the acc
Slide 26: Maintaining 2024 Guidance
Q2 2024 RESULTS MAINTAINING 2024 GUIDANCE* NET SALES EBITDA MARGIN FREE CASH FLOW ADJUSTED EPS Before special items Before acquisitions In the range of In the range of In the range of In the range of DKK 8.8–9.1 billion 22.0%-24.0% DKK 0.8-1.0 billion DKK 12.5-14.5 • Guidance for 2024 is exclusive o
Slide 27: Questions and Answers
Q2 2024 RESULTS FIND OUT MORE QUESTIONS AND ANSWERS Annual Report 2023 Our 2023 Annual Report addresses our financial performance, strategic execution and other important aspects of our business operations. We are happy to take any questions from the audience now. Visit our investor site at: www.st-
Slide 28: 2024 Event Calendar & Contact
Q2 2024 RESULTS 2024 EVENT CALENDAR & CONTACT JAN-MAR APR-JUN SEPTEMBER JUL-SEP SEPTEMBER OCT-DEC 5 March 2024 4 April 2024 22 AUG 2024 12 NOV 2024 Full year/Q4 2023 results Annual General Meeting H1/Q2 interim report Q3 interim report 2 MAY 2024 Q1 interim report Torben Sand Eliza Dabbagh Scandinav
Slide 29: Long Term Trend - EBITDA Margins (FY 2018-FY 2023)
Q2 2024 RESULTS LONG TERM TREND - EBITDA MARGINS (FY 2018-FY 2023) THE GROUP % % NAOR 30 25 25 20 20 15 15 10 10 5 5 0 0 FY 18 FY 19 FY 20 FY 21 FY 22 FY 23 FY 18 FY 19 FY 20 FY 21 FY 22 FY 23 NABROW EUROPE BRANDED % % 50 30 25 40 20 30 15 20 10 10 5 0 0 FY 18 FY 19 FY 20 FY 21 FY 22 FY 23 FY 18 FY
Slide 30: Thank You
SCANDINAVIAN TOBACCO GROUP THANK YOU
Scandinavian Tobacco Group — Q2 2024 Earnings Presentation on 6ix