STG Stonepath Grp.

Strong EBITDA and cash flow - accelerated efficiency programme


HIGHLIGHTS FOR 1 JANUARY-30 SEPTEMBER 2016
The first nine months showed stable overall performance with improving underlying EBITDA margin and continued strong cash flow. Focus on implementing new regulations in EU and the US as well as delivering on our optimisation and efficiency programme.

• Reported net sales of DKK 4,938 million (DKK 4,965 million) - organic growth was 0.0%
• Reported EBITDA of DKK 960 million (DKK 939 million) - organic growth was 1.9%
• Net profit of DKK 498 million (DKK 493 million)
• Free cash flow was DKK 792 million (DKK 731 million)

Highlights for the THIRD quarter of 2016
EBITDA and cash flow improved significantly in a quarter where net sales remained flat. Efficiency and cost optimisation programme was accelerated and today we announce new initiatives with annual savings of DKK 60-65 million.

• Reported net sales of DKK 1,740 million (DKK 1,741 million) - organic growth was -0.2%
• Reported EBITDA of DKK 328 million (DKK 305 million) - organic growth was 4.9%
• Net profit of DKK 152 million (DKK 139 million)
• Free cash flow was DKK 627 million (DKK 421 million)

fINANCIAL GUIDANCE 2016

• We expect 2016 total net sales to be on the same level as last year implying an organic growth of 0% (previously 1-3%).
• We maintain our guidance for organic growth in adjusted EBITDA of 3-5% and capital expenditures of approximately DKK 250 million.
   
   

Statement by CEO Niels Frederiksen:

"I am pleased that we delivered significant improvements in EBITDA and a continued strong cash flow in the quarter. This is driven by the impact from our optimisation and efficiency programme, which progresses well. Our cost programme has been accelerated by one year, and today we announce new initiatives to improve our operating   model. We will optimise our sales and support functions and merge our supply chain for machine-made cigars, pipe tobacco and fine-cut tobacco into one.

Our nine-month net sales performance has been stable. Our US handmade cigars business continues to grow and outperform the market. Net sales have been impacted across all categories from fluctuations following new FDA regulations in the US and the late adoption of new EU regulations in to national legislation."

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