Scandinavian Tobacco Group A/S Reports Q2 2024 Results
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Scandinavian Tobacco Group A/S Reports Second Quarter 2024 Results
Company Announcement No. 47/2024
Scandinavian Tobacco Group A/S has reported remarkable financial performance for the second quarter of 2024, reflecting a 6.3% increase in reported net sales, reaching DKK 2.4 billion. The EBITDA margin before special items stood at 24.5%. The company experienced an organic net sales growth of 4.8%, significantly driven by Handmade Cigars and Next Generation Products. The decline in Machine-Rolled Cigars and Smoking Tobacco saw improvements compared to earlier quarters.
Second Quarter 2024 Financial Highlights
This quarter showcased several key financial metrics demonstrating Scandinavian Tobacco Group's solid market performance:
- Net sales amounted to DKK 2,366 million compared to DKK 2,225 million, marking a 4.8% positive organic growth.
- EBITDA before special items rose to DKK 580 million from DKK 514 million, achieving an EBITDA margin improvement to 24.5% from 23.1%.
- Adjusted Earnings Per Share (EPS) experienced growth, reaching DKK 4.1, compared to DKK 3.5.
- Free cash flow before acquisitions was DKK 177 million, an increase from DKK 159 million.
- Return on Invested Capital (ROIC) was 10.5%, slightly down from 13.1% in the prior period.
- The Growth Enablers segment delivered a strong double-digit growth rate, contributing to 12% of overall net sales.
- For the first half of 2024, net sales grew by 3.0% to DKK 4.3 billion, compared to DKK 4.2 billion, with organic net sales growth at 1.5%.
Strategic Developments and CEO Insights
CEO Niels Frederiksen expressed optimism regarding the financial performance, stating, "The second quarter financial performance supports our expectation for the full year. During the past months, we have taken material steps in executing our strategy to safeguard our financial performance in challenging markets. The new commercial structure has been completed, and we aim to re-establish our position in machine-rolled cigars while enhancing cost agility throughout the group. Our acquisition of Mac Baren serves to strengthen our tobacco business and deliver meaningful synergies, enhancing shareholder value.”
Acquisition of Mac Baren Tobacco Company
Effective from 1 July 2024, Scandinavian Tobacco Group successfully acquired Mac Baren Tobacco Company A/S for DKK 535 million. Mac Baren is a prominent player in the global smoking tobacco market, boasting a strong portfolio of pipe tobacco brands, fine-cut tobacco brands, and offerings in the nicotine pouch category. This acquisition not only enriches the company’s brand portfolio in the smoking tobacco segment but also enhances its footprint in the nicotine pouch sector, contributing positively to future financial prospects.
Financial Guidance for 2024
The company's financial guidance for 2024 remains unchanged, highlighting the following projections:
- Anticipated net sales in the range of DKK 8.8 billion to DKK 9.1 billion.
- Target EBITDA margin before special items to be between 22% to 24%.
- Expected free cash flow before acquisitions is projected between DKK 0.8 billion and DKK 1.0 billion.
- Adjusted EPS is anticipated to fall within the range of DKK 12.5 to DKK 14.5.
It is important to note that the financial guidance does not factor in the acquisition impact from Mac Baren Tobacco Company. The financial implications of this acquisition will be disclosed upon completion of the integration planning phase, and no later than during the third quarter interim report.
Contact Information
For further inquiries, please contact:
Torben Sand, Director of IR & Communication, phone +45 5084 7222, or email torben.sand@st-group.com.
Frequently Asked Questions
What were the key financial highlights for Q2 2024?
Scandinavian Tobacco Group reported a net sales increase to DKK 2,366 million and an EBITDA margin of 24.5% in Q2 2024, reflecting strong performance.
How did the acquisition of Mac Baren impact the company?
The acquisition of Mac Baren is expected to enhance Scandinavian Tobacco Group's brand portfolio and improve financial results through synergies.
What is the company's financial guidance for 2024?
The financial guidance for 2024 includes projected net sales of DKK 8.8-9.1 billion and an EBITDA margin of 22%-24%.
Who is the CEO of Scandinavian Tobacco Group?
The CEO is Niels Frederiksen, who has emphasized strategic advancements and market positioning in recent months.
When will the financial impact of the Mac Baren acquisition be disclosed?
The financial impact will be shared following the integration planning, ahead of the third quarter interim report release.
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