COMPANY ANNOUNCEMENT No. 6/2017
Copenhagen, 16 March 2017
Annual Report 2016
Improved EBITDA and Strong Cash Flows on the Base of Flat Net Sales
Scandinavian Tobacco Group A/S - a world-leading manufacturer of cigars and traditional pipe tobacco - announces its result for the fourth quarter and full year 2016. Organic growth in adjusted net sales and EBITDA delivered in accordance with our guidance published on 3 November 2016. The Board of Directors proposes an ordinary dividend of DKK 5.50 per share, an increase of 10%.
Highlights 2016:
- Net sales increased by 0.2% to DKK 6,746 million - organic growth of 0.4%
- Reported EBITDA increased by 2.6% to DKK 1,279 million - organic growth in EBITDA of 4.0%
- Profitability improvement leading to an adjusted EBITDA margin of 21.4% (20.5%)
- Net profit increased by 2.1% to DKK 681 million
- Free cash flow increased by 7.8% to DKK 1,139 million
- The Board of Directors will continue to evaluate distribution of possible excess cash in relation to the third quarter announcement in November 2017.
CEO Niels Frederiksen comments: "2016 was a year of solid performance. We improved our EBITDA and had a strong free cash flow on the base of flat net sales. The performance reflects our plans and efforts. We continue to grow our handmade cigars business and see further opportunities to outperform total markets in Americas that now represents close to half of our business."
"In addition, we have accelerated and extended our cost optimisation and efficiency programmes to a total of approx. DKK 200 million. Our working capital reduction programme continued to deliver ahead of plan and we now expect to reach the DKK 500 million target reduction by the end of this year, one year ahead of plan."
"During the first months of 2017, our online and catalogue retail business in the US implemented new IT infrastructure and warehouse management systems. The implementation has caused significant interruptions of a temporary nature in our sales, invoicing and customer service that will affect our full-year 2017 performance. As a consequence, we expect growth in EBITDA to be somewhat lower than the previous year. We are confident, though, that the IT implementation is close to completion and we expect to deliver 1-3% organic EBITDA growth in 2017."
Guidance for 2017 For 2017, we expect flat organic net sales and an organic growth of 1-3% in EBITDA. During the first quarter, we expect organic growth in net sales and EBITDA to be negative.
The annual report for 2016 is available for download on: investor.st-group.com.
Conference Call and Webcast
A conference call and webcast will be held on 16 March 2017 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 32 71 16 60
The UK: +44 20 3427 1909
The US: +1 646 254 3362
Passcode: 4091763
Webcast: http://edge.media-server.com/m/p/f9fxyhqy
For further information, please contact:
For media enquiries: Kaspar Bach Habersaat, Director of Group Communications, phone: +45 7220 7152 or kaspar.bach@st-group.com. For investor enquiries:
Torben Sand, Head of Investor Relations, phone: +45 7220 7126 or torben.sand@st-group.com.
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