Frederiksen went on to say that because STG entered the COVID-19 crisis from a strong position and has remained in good financial health through it, the company expects a negative impact from the pandemic on its business in 2020. To ensure future success, the company is focusing on costs and strengthening its focus on cash and liquidity. In March, the company had suspended its financial guidance for 2020 but because it now has been able to review the impact of COVID-19 on its business and the Royal Agio Cigars integration has been completed, it may release and updated guidance sooner rather than later. Some assumptions necessary to update the guidance are still uncertain as it looks at the rest of 2020.
“The guidance is based on assumptions of a moderate decline in organic net sales growth for the full year with the highest decline in organic net sales growth in the second quarter and a gradual normalization over the third and fourth quarter as markets reopens and with no material disruptions to our supply-chain. We expect a contribution from cost savings in relation to the integration of Agio Cigars of about DKK 70-80 million in 2020 as well as further benefits from our Fuelling the Growth program. Special costs are expected to be about DKK 415-435 million, including a non-cash impairment charge of DKK 109 million. The intention to initiate the previously announced share buy-back program at a total value of up to DKK 300 million remains unchanged.”
You can review STG’s full first quarter 2020 financial report by clicking here.
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