Scandinavian Tobacco Group releases key financial data for the second quarter of 2022 and revises its guidance for the full year

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company announcement
No. 51/2022

Copenhagen, August 21, 2022

Scandinavian Tobacco Group releases key financial data for the second quarter of 2022 and revises its guidance for the full year

In the second quarter of 2022, Scandinavian Tobacco Group achieved net sales of DKK 2,278 million and EBITDA before exceptional items of DKK 544 million. Organic net sales growth was negative 1.8% and organic EBITDA growth was negative 14.6%. Free cash flow before acquisitions was DKK 143 million and adjusted earnings per share was DKK 3.6. Despite comparing with exceptionally strong growth over the past two years, performance was disappointing and below our expectations for the quarter.

Free cash flow forecast before acquisitions is maintained at DKK 1.1-1.4 billion and adjusted EPS forecast is maintained at > 5%. The guidance for organic EBITDA growth in 2022 is however revised to the range of -4% to 0% (from 0% to 6%).

The main reason for the revised EBITDA guidance is the lack of productivity improvement in our supply chain. We believe that supply chain challenges are temporary in nature and not structural. We are making progress, but it is taking longer than expected due to a combination of external and internal factors, and the level of production backlog is not reduced as expected and amounted to almost DKK 150 million at the end of July. We expect to see improvements in the second half of the year, but the delay will negatively impact full year costs.

Consumers of handcrafted cigars in the United States have become more cautious due to macroeconomic developments. Consequently, for 2022, craft cigar volumes are now expected to decline more than their long-term trend of around -2%, which will lead to a lower sales outlook for the Group. We now expect net sales growth close to zero (vs. positive).

The interim report for the second quarter of 2022 will be published as planned on August 24 after market close, where more details on quarterly performance and expectations for 2022 will be communicated. Webcast August 25 CET 10:00 a.m.

For more information, please contact:
Torben Sand, Head of Investor Relations,
phone: +45 5084 7222 or [email protected]

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