SCANDINAVIAN TOBACCO GROUP GROWS ITS LEADERSHIP IN CIGARS AND PIPE TOBACCO

• Net sales for the full year were 6,126 MDKK (5,925). In local currencies net sales grew by 3.8%.
• All of our core tobacco categories and all of our core regions North America, Europe and Australia and New Zealand grew net sales in local currencies.
• EBITDA was 1,177 MDKK (1,175). In local currencies EBITDA grew by 0.7%.
• Cash flow from operating activities grew by 42% and amounted 1,056 MDKK (745).
• Outlook: Based on planned growth activities and continued optimisation in our supply chain, we expect to deliver improved earnings across categories.

Newly appointed CEO of Scandinavian Tobacco Group, Niels Frederiksen, says:

“We continue to consolidate lucrative niches of the tobacco market by growing our leadership in cigars and pipe tobacco. In 2014, we grew net sales at a stable pace in all of our core categories handmade and machine-made cigars, pipe tobacco and fine cut. This was achieved by leveraging our significant scale and diversified geographical market footprint across three continents and more than 100 markets.”

“Our handmade cigar business continues to grow at a rapid pace and now accounts for one quarter of our net sales. In 2014, our handmade cigars category grew by 9.6% driven by our US market leading manufacturer, General Cigar, and online retailer Cigars International. The handmade cigar category is one of our fastest growing categories with a sustainable year-on-year growth of 5.8% since 2012.”

“These results confirm that we can grow our business across all of our categories by innovating and adapting to remain smoker’s preferred choice. Last year, General Cigar launched 124 new cigar variants, which delivered one-seventh of its net sales, and grew its market share close to 30%.”

“US online retailer, Cigars International, achieved double-digit net sales growth for the eighth consecutive. Cigars International’s market share is now above 30% making it the clear US leader in the direct-to-consumer premium cigar and pipe tobacco categories.”

“Despite declining volume developments in most of our markets, we expect to improve earnings across categories by growing our net sales and optimising our supply chain.”