Scandinavian Tobacco Group Reports Q2 Net Sales of US$320 Million, Down 2.3% Year on Year

Due to an unstable trading environment, Scandinavian Tobacco Group reported net sales of $320 million in the second quarter, a decrease of 2.3% year-on-year.

[Two Supremes News] According to Tobacco Reporter on August 29, Scandinavian Tobacco Group (STG) announced that its net sales for the second quarter of 2023 were 2.2 billion Danish Kroner ($320.09 million), down 2.3% from the same period in 2022. Its profit margin before interest and income tax was 23.1%, with free cash flow before acquisitions reaching 159 million Danish Kroner.

The group reported that due to a more unstable trading environment than expected, it has lowered its full-year net sales guidance to between 8.7 billion and 9 billion Danish Kroner. STG stated that this adjustment reflects ongoing inventory adjustments by customers and distributors, a slower recovery of market share in Europe, delays in new store openings in the U.S., and currency fluctuations.

STG CEO Niels Frederiksen stated, "In a turbulent environment, although we continue to make good progress towards our goal of expanding the company through retail expansion, acquisitions, and portfolio diversification, we have to adjust our guidance."

"In the second quarter, we completed our second acquisition of the year and opened another International Cigar retail supermarket. In the remaining time this year, we will focus on leveraging our current strengths in online business and building stronger momentum for our European brand business."

The company expects a rebound in net sales growth in the second half of the year, with free cash flow before acquisitions slightly higher than in the second half of 2022.

References:

[1] Volatile Environment Weakens STG Quarter