Company Announcement
No. 14/2025

Copenhagen, 27 August 2025

Interim report, 1 January – 30 June 2025

Scandinavian Tobacco Group A/S Reports Second Quarter 2025 Results and Reaffirms Expectations for Full-Year.
 

For the second quarter 2025, reported net sales were DKK 2.4 billion with an organic net sales growth of -4%. EBITDA before special items was DKK 499 million with an EBITDA margin of 21.1% compared with 24.5% last year. Free cash flow before acquisitions was DKK 119 million and the adjusted EPS were DKK 3.3. The results support the expectations for the full year which are reaffirmed.

The reported net sales were enhanced by the addition of the Mac Baren business, whereas exchange rate developments impacted growth negatively. The development in organic net sales was flat excluding the discontinuation of distribution of ZYN in the US (-3%) and lower sales from contract manufacturing and of accessories in the profitable Australian market. Organic growth recovered in the product categories Handmade Cigars and Machine-Rolled Cigars & Smoking Tobacco and our nicotine pouch brand XQS continued to deliver double digit growth.

The EBITDA margin before special items recovered in the second quarter compared with the first quarter of the year leaving the margin for the first six months of the year at 18.8% (21.2%). The decline in the margin compared with 2024 is driven by a combination of product and market mix, investments in re-gaining market shares in machine-rolled cigars in key European markets, discontinuation of distribution of ZYN in the US and generally challenging market conditions. The discontinuation of ZYN will not impact the year-on-year comparisons from the third quarter and onwards. Free cash flow before acquisitions for the first six months improved to DKK 275 million.

Second Quarter 2025

• Reported net sales decreased by 0.2% to DKK 2.4 billion (DKK 2.4 billion)
• Organic net sales growth was negative by 4.1% (4.8%)
• EBITDA margin before special items was 21.1% (24.5%)
• Adjusted EPS were DKK 3.3 (DKK 4.1)
• Free cash flow before acquisitions was DKK 119 million (DKK 177 million).

• Return on Invested Capital (ROIC) was 8.3% (10.5%).

First six months 2025

• Reported net sales increased by 0.5% to DKK 4.3 billion (DKK 4.3 billion)
• Organic net sales growth was negative by 6.3% (1.5%)
• EBITDA margin before special items was 18.8% (21.2%)
• Adjusted EPS were DKK 4.7 (DKK 5.8)
• Free cash flow before acquisitions was DKK 275 million (DKK 52 million)

CEO Niels Frederiksen: “Despite the challenging market environment driven by tariffs and geopolitical unrest, I am pleased that we have remained focused on delivering on our strategic priorities. The Mac Baren integration is on track to create substantial value, our market positions in machine-rolled cigars have stabilized, and the Growth Enablers continue to enhance our net sales performance. Although the EBITDA margin decreased compared to last year, the results for the second quarter support our expectations for the full year, including delivery of DKK 800-1,000 million in free cash flow before acquisitions. We are in the process of updating our strategy for the next five years to 2030 and I look forward to sharing more details with you later in the year”.

Financial expectations for full year 2025

The financial expectations for full year 2025 are maintained. The biggest uncertainties to the expectations are the market developments, including consumer behaviour and pricing for handmade cigars in the US as well as the development of the USD, which in particular can impact reported net sales.

Reported net sales                   DKK 9.1-9.5 billion        
EBITDA margin before special items       18-22%                        
Free cash flow before acquisitions          DKK 0.8-1.0 billion        

Adjusted EPS                            DKK 10-13       

Guidance and assumptions are based on no impact from potential new acquisitions and at exchange rates as of the reporting date.  A 10% change in the USD/DKK exchange rate would impact group net sales by approximately 5 percentage points with EBITDA margins being only marginally impacted.

For further information, please contact:
Torben Sand, Director of IR & Communication, phone +45 5084 7222, torben.sand@st-group.com.
Eliza Dabbagh, IR & Communications, phone +45 5080 7619, eliza.michael@st-group.com.

A conference call will be held on 28 August 2025 at 10.00 CEST. Dial-in information and an accompanying presentation will be available at investor.st-group.com/investor around 09:00 CEST.