Danske Bank kommentar: STG – Q4 20

Scandinavian Tobacco (OW): Out with the Q4 20 and annual report this morning. Looks to be roughly in line with Bloomberg consensus on revenues, but falling somewhat short on EBIT at DKK203m vs. DKK317. Overall though, the group has had a strong 2020 and has been boosted by people spending time at home and therefore also consuming more of the groups products. Since these effects are expected to carry on into 2021, STG also put out a solid outlook for 2021 with an expected organic EBITDA growth of more than 7% and well as an “increase” in organic net sales growth. STG will however, also continue its generous shareholder distributions and will pay out DKK650 in dividend as well as DKK600m in share buy backs covering more than the expected free cash flow in 2021. Hence we do not see any upside to the current ‘Baa3’ rating in the short term. Overall a credit neutral report in our view.