Scandinavian Tobacco Group A/s · OMXCOP:STG
Scandinavian Tobacco Group A/s — Q3 2024 Earnings Presentation
27 slides from Scandinavian Tobacco Group A/s's earnings presentation, Nov 13, 2024
Slide 1: Creating Moments of Enjoyment - Q3 2024 Results
CREATING MOMENTS OF ENJOYMENT Investor Presentation | Third Quarter 2024 Results | 12 November 2024
Slide 2: A Global Leader in Cigars - Corporate Summary
Q3 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 8.3 billion DKK 104 79.8 million • ALMOST 1 MILLION ONLINE CUSTOMERS
Slide 3: Agenda
Q3 2024 RESULTS AGENDA Q3 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: Q3 2024 Highlights
Q3 2024 HIGHLIGHTS STRATEGY UPDATE NIELS FREDERIKSEN, CEO
Slide 5: Highlights
Q3 2024 RESULTS Q3 2024 HIGHLIGHTS • Third quarter performance support full year expectations • Machine-rolled cigars improving. No recovery yet in handmade Q3 2024 Q3 2023 cigars consumption Net Sales Growth 7.1% -3.9% • XQS continue to deliver high double-digit growth EBITDA margin before special
Slide 6: Strategy Update and Other Key Events
Q3 2024 RESULTS STRATEGY UPDATE AND OTHER KEY EVENTS PURPOSE CRAFT THE RITUALS THAT MAKE US MORE Integration plan for Mac Baren completed VISION BE THE UNDISPUTED & SUSTAINABLE GLOBAL LEADER IN CIGARS Staying fit for GROWING OUTSTANDING AMBITION LARGER COMPANY EBITDA MARGIN CASH GENERATION the futur
Slide 7: Mac Baren Tobacco Company A/S: A Value Adding Bolt-On Acquisition
Q3 2024 RESULTS MAC BAREN TOBACCO COMPANY A/S A VALUE ADDING BOLT-ON ACQUISITION • Transaction value DKK 535 million paid in cash • Expected impact to Group financials H2 2024: • Net sales ~DKK 300 million • EBITDA-margin with negative impact to Group • Expected synergies by full integration (2027)
Slide 8: Core Markets Update & Product Categories
Q3 2024 HIGHLIGHTS CORE MARKETS UPDATE & PRODUCT CATEGORIES REGIS BROERSMA, CCO
Slide 9: Product Category Performance
Q3 2024 RESULTS PRODUCT CATEGORY PERFORMANCE Q3 2024 9M 2024 Share of Share of Organic Reported Organic Reported Group Net Group Net Growth (%) Growth (%) Growth (%) Growth (%) sales (%) sales (%) Handmade Cigars 36% -1% -1% 37% 2% 2% MRC and Smoking Tobacco 50% 3% 15% 47% -3% 0% Next Generation Pro
Slide 10: Handmade Cigars
Q3 2024 RESULTS HANDMADE CIGARS • Reported net sales growth in Q3 2024 at -1% (9M 2024 at +2%) • Consumption of handmade cigars in the US continue to decline by an estimated mid-single digit percentage. Timing for improvement remains uncertain • More value-for-money demand and high promotional press
Slide 11: Machine Rolled Cigars & Smoking Tobacco
Q3 2024 RESULTS MACHINE ROLLED CIGARS & SMOKING TOBACCO • Reported net sales growth in Q3 2024 at 15% (9M 2024 at 0%) • Mac Baren added about 11% to reported net sales growth in Q3 • Improvement for machine-rolled cigars compared with the two previous quarters • Total market decline estimated at -1.
Slide 12: Next Generation Products
Q3 2024 RESULTS NEXT GENERATION PRODUCTS • Reported net sales growth in Q3 2024 at 72% (9M 2024 at 206%) • The XQS brand increased by 122% in Q3 (9M 2024 >3x) • Market share gains in both Sweden and the UK • Launch of the brand in Denmark in September • Discontinuation of third-party distribution of
Slide 13: Divisions & Group Financials
Q3 2024 HIGHLIGHTS DIVISIONS & GROUP FINANCIALS MARIANNE BOCK, CFO
Slide 14: Europe Branded
Q3 2024 RESULTS EUROPE BRANDED 900 NET SALES 10% 700 5% Q3 2024 Highlights 500 0% • Reported net sales growth at 19%, whereof 12% from acquisitions 300 -5% 100 • Organic net sales growth at 6% driven by NGP, Handmade Cigars -100 -10% and Smoking Tobacco Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Net sa
Slide 15: North America Branded & ROW
Q3 2024 RESULTS Q3 2024 RESULTS NORTH AMERICA BRANDED & ROW 1,000 NET SALES 0% Q3 2024 Highlights 750 500 -5% • Reported net sales growth at 4%, with 8% contribution from acquisitions 250 • Organic net sales growth -5% driven by continued high decline rate in 0 -10% Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q
Slide 16: North America Online & Retail
Q232024 Q3 2024 RESULTS RESULTS NORTH AMERICA ONLINE & RETAIL 1000 NET SALES Q3 2024 Highlights 13% 750 11% • Reported net sales growth at marginally negative. Mac Baren added 500 8% 1.5% to net sales and exchange rates -1% 6% 3% 250 • Organic net sales growth negative by 1%. Impacted by 1% 0 -2% di
Slide 17: Q3 and 9M 2024 Results
Q3 2024 RESULTS Q3 AND 9M 2024 RESULTS DKK million Q3 2024 Q3 2023 9M 2024 9M 2023 FY 2023 Net sales 2,431 2,269 6,745 6,456 8,731 Gross profit (before special items) 1,126 1,092 3,116 3,115 4,204 OPEX -567 -490 -1,661 -1,526 -2,111 Other income 8 0 28 0 12 EBITDA before special items 568 602 1,483
Slide 18: Q3 and 9M 2024 Key KPIs
Q3 2024 RESULTS Q3 AND 9M 2024 KEY KPI’S DKK million Q3 2024 Q3 2023 9M 2024 9M 2023 FY 2023 Organic net sales growth -0.1% -1.1% 0.9% -1.2% 0.3% Gross margin 46.3% 48.2% 46.2% 48.3% 48.2% OPEX ratio 23.3% 21.6% 24.6% 23.6% 24.2% EBITDA margin 23.4% 26.5% 22.0% 24.6% 24.1% 18
Slide 19: Net Debt and Leverage
Q3 2024 RESULTS NET DEBT AND LEVERAGE NIBD AND LEVERAGE • Net Interest-bearing Debt (NIBD) increased by DKK 1.7 5,804 6,000 3.5 billion versus the end of 2023 to DKK 5.8 billion. Compared with the end of the second quarter, the increase was close 5,000 to DKK 0.5 billion 4,482 3.0 2.9 4,057 • The in
Slide 20: Shareholder Returns
Q3 2024 RESULTS SHAREHOLDER RETURNS CAPITAL DISTRIBUTION 1,600 • Shareholder Return Policy with ambition of annual growth in ordinary dividend payments and distributing excess capital 1,200 800 • Almost DKK 1.4 billion returned in the first nine-months of 2024 400 • Execution of up to DKK 850 millio
Slide 21: Financial Expectations 2024
Q3 2024 FINANCIAL EXPECTATIONS 2024 NIELS FREDERIKSEN, CEO
Slide 22: Updating 2024 Guidance with Mac Baren
Q3 2024 RESULTS UPDATING 2024 GUIDANCE WITH MAC BAREN* NET SALES EBITDA MARGIN FREE CASH FLOW ADJUSTED EPS Before special items Before acquisitions NEW In the level of In the range of In the range of In the level of DKK 9.1 billion 22.0%-23.0% DKK 0.8-0.9 billion DKK 12.5 NET SALES EBITDA MARGIN FRE
Slide 23: Questions and Answers
Q3 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 24: 2025 Event Calendar & Contact
Q3 2024 RESULTS 2025 EVENT CALENDAR & CONTACT JAN-MAR APR-JUN SEPTEMBER JUL-SEP SEPTEMBER OCT-DEC 6 March 2025 9 April 2025 27 AUG 2025 11 NOV 2025 Full year/Q4 2024 results Annual General Meeting H1/Q2 interim report Q3 interim report 14 MAY 2025 Q1 interim report Torben Sand Eliza Dabbagh Scandina
Slide 25: Long Term Trend - EBITDA Margins Q3 2018-Q3 2024
Q3 2024 RESULTS LONG TERM TREND - EBITDA MARGINS Q3 2018-Q3 2024 THE GROUP NAOR % % 40 25 30 20 15 20 10 10 5 0 0 Q3 18 Q3 19 Q3 20 Q3 21 Q3 22 Q3 23 Q3 24 Q3 18 Q3 19 Q3 20 Q3 21 Q3 22 Q3 23 Q3 24 % EUROPE BRANDED % NABROW 40 50 30 40 30 20 20 10 10 0 0 Q3 18 Q3 19 Q3 20 Q3 21 Q3 22 Q3 23 Q3 24 Q3
Slide 26: Long Term Trend - EBITDA Margins (FY 2018-FY 2023)
Q3 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 27: Thank You
SCANDINAVIAN TOBACCO GROUP THANK YOU
Scandinavian Tobacco Group — Q3 2024 Earnings Presentation on 6ix