Scandinavian Tobacco Group A/S – Interim report, 1 January-30 September 2019

 Company AnnouncementNet sales of DKK 1,846 million (DKK 1,887 million). Organic growth -4.5%EBITDA before special items of DKK 446 million (DKK 398 million). Organic growth 5.4%EBITDA margin before special items was 24.2% (21.1%). Excluding IFRS 16, the margin improved by 1.9% pointsFree cash flow before acquisitions of DKK 503 million (DKK 327 million)Earnings Per Share (EPS) of DKK 1.7 (DKK 2.2). EPS adjusted for special items of DKK 2.6 (DKK 2.4)Agreement of the terms and conditions for the acquisition of Royal Agio CigarsIn the third quarter of 2019, Scandinavian Tobacco Group A/S delivered net sales of DKK 1,846 million and EBITDA before special items of DKK 446 million. The quarter delivered positive organic growth in EBITDA of 5.4% with EBITDA margins (excluding IFRS 16) improving by 1.9% driven by Region Smoking Tobacco & Accessories and North America Branded. Organic growth in net sales was negative by 4.5% driven by all divisions. In the first nine months of 2019, the Group reported negative organic net sales growth of 2.4% and organic EBITDA growth of 5.8%, generating a free cash flow before acquisitions of DKK 819 million (DKK 464 million) and an EPS of DKK 4.7 (DKK 5.1). EPS adjusted for special items were DKK 5.9 (DKK 5.4).Financial guidance for 2019
The full-year guidance for free cash flow is revised up and is now about 1 billion from previously >750 million. Special items are expected to be about DKK 200 million. The revised expectation includes transaction costs from the Royal Agio Cigars acquisition of about DKK 20 million, costs for the closure of Scandinavian Tobacco Group Lane Ltd.’s facility in the US of up to DKK 120 million and lower than previously anticipated costs relating to the Fuelling the Growth program. The guidance for organic growth in EBITDA is unchanged.>5% organic growth in EBITDASpecial items of about DKK 200 millionFree cash flow before acquisitions about 1 billion (previous >DKK 750 million)In the fourth quarter of 2019, we expect that the development in organic net sales will remain weak.
Conference Call and Webcast A conference call and webcast will be held on 14 November 2019 at 10:00 AM CET. Presentation materials will be available online approximately one hour before the webcast on investor.st-group.com. Dial-in details: Denmark:       +45 3272 8042 The UK:          +44 (0) 844 571 8892 The US:          +1 631 510 7495 Passcode:      3155398 https://edge.media-server.com/mmc/p/duuim98j
For further information, please contact: Investors: Torben Sand, Head of Investor Relations, phone: +45 5084 7222 or torben.sand@st-group.com Media: Simon Mehl Augustesen, Director of Group Communications, phone: +45 5084 7211 or simon.augustesen@st-group.comAttachmentQ3 2019 Interim Report