Scandinavian Tobacco Group A/s · OMXCOP:STG
Scandinavian Tobacco Group A/s — Q3 2022 Earnings Presentation
17 slides from Scandinavian Tobacco Group A/s's earnings presentation, Nov 9, 2022
Slide 1: Investor Presentation Third Quarter 2022
INVESTOR PRESENTATION THIRD QUARTER 2022 9 NOVEMBER 2022
Slide 2: Agenda
AGENDA 1. Q3 2022 Highlights – Niels Frederiksen, Chief Executive Officer 01 NIELS FREDERIKSEN Chief Executive Officer 2. Business Updates – Niels Frederiksen, Chief Executive Officer 3. Our Commercial Divisions – Marianne Rørslev Bock, Chief Financial Officer 02 MARIANNE RØRSLEV BOCK 4. Group Finan
Slide 3: Q3 2022 Highlights
Q3 2022 HIGHLIGHTS • Organic net sales growth of -1.4%, organic EBITDA growth of -6.2%, FCF before acquisitions DKK 462 million • The financial performance is in-line with performance expectations as organic net sales remained stable • Free cash flow before acquisitions remains solid despite working
Slide 4: Business Update
Super-store BUSINESS UPDATE Technology Performance Insights and ONEPROCESS Data Rolling Towards Functional 2025 People Processes Operating Governance Model 4
Slide 5: Our Divisions
OUR DIVISIONS
Slide 6: Europe Branded
EUROPE BRANDED • Organic net sales growth of more than 1% driven by strong price management • Price/mix impact above 5% for the largest product category machine-rolled cigars • Market volume down by approx. 3% with combined volume market share index stabilizing at 30.4% in Q3 2022 (30.5% Q2 2022) •
Slide 7: Europe Branded Looking Ahead
EUROPE BRANDED LOOKING AHEAD • Structural decline rate in machine-rolled cigar volumes expected at about -3% • Focus on price management before market shares to secure profitable positive organic net sales growth • Simplification initiatives and price increases are expected to support long-term marg
Slide 8: North America Branded & RoW
NORTH AMERICA BRANDED & ROW • US handmade cigar consumers have become more cautious. Although volumes have declined from peak in 2021, consumption is still perceived as resilient • Reversal to pre-pandemic product and market mix have continued • Organic net sales growth was zero with volume declines
Slide 9: North America Branded & RoW Looking Ahead
NORTH AMERICA BRANDED & ROW LOOKING AHEAD • In 2022, the consumption of handmade cigars in the US has resumed to a declining trend (coming off the pandemic increase). In the coming quarters, development could exceed its structural decline rate of 2% as consumers have become more cautious • The retai
Slide 10: North America Online & Retail
NORTH AMERICA ONLINE & RETAIL • The decline in consumption of handmade cigars in combination with the slower than expected return of the channel balance between online and retail continue to impact organic net sales for the NAOR division • The decline in organic net sales was 6% during the quarter.
Slide 11: North America Online & Retail Looking Ahead
NORTH AMERICA ONLINE & RETAIL LOOKING AHEAD • The increased caution amongst consumers constitutes a risk for down-trading in the upcoming quarters with limited scope for compensating general cost inflation with price increases. This could put pressure on margins in the coming quarters • The channel
Slide 12: Group Financials and Capital Allocation
GROUP FINANCIALS AND CAPITAL ALLOCATION
Slide 13: Q3 and 9M 2022 Results
Q3 2022 (Q3 2021) Q3 AND 9M 2022 RESULTS -1.4% organic net sales growth (-2.2%) D K K m illio n Q 3 2022 Q 3 2021 9M 2022 9M 2021 F Y 2021 F Y 2020 49.6% gross margin (50.5%) N et s ales 2,362 2,1 82 6,57 7 6,221 8,233 8,006 22.9% OPEX ratio (23.2%) G ro s s p ro fit (b e fo re s p e cia l ite m s )
Slide 14: Net Debt and Leverage
NET DEBT AND LEVERAGE • Net Interest-bearing Debt (NIBD) increased by DKK 872 million versus year-end 2021 as result of capital allocation, exchange rate developments and increasing lease liabilities • Leverage ratio decreased to 1.9x EBITDA versus 2.0x by end of Q2 2022. By year-end 2021 the levera
Slide 15: Full Year 2022 Guidance
FULL YEAR 2022 GUIDANCE Organic -4% to 0% FINANCIAL ASSUMPTIONS EBITDA growth (unchanged) GUIDANCE Net sales, organic growth About zero Free Cash Flow before acquisitions 1.1-1.4B Financial expenses, excl. forex ~DKK 135-140 million (from 110-120 million) (DKK) (unchanged) Special items (P&L) ~DKK 0
Slide 16: Questions and Answers
FIND OUT MORE QUESTIONS AND ANSWERS Annual Report 2021 Our 2021 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. Sustainability Report 2021 Our Sustainability Repor
Slide 17: Event Calendar & Contact
EVENT CALENDAR & CONTACT JAN-MAR APR-JUN JUL-SEP SEPTEMBER OCT-DEC 8 March 2023 13 April 2023 29 AUG 2023 8 NOV 2023 Full year/Q4 2022 results Annual General Meeting H1/Q2 interim report Q3 interim report 17 MAY 2023 Q1 interim report Torben Sand Eliza Michael Scandinavian Tobacco Group A/S Director
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