Scandinavian Tobacco Group A/S Reports Encouraging Growth in 2024
Scandinavian Tobacco Group A/S: Overview of 2024 Performance
Scandinavian Tobacco Group A/S announced its remarkable performance for the full year 2024, highlighting a significant growth trend. The company reported a substantial increase in net sales, surging by 5.4% to reach DKK 9.2 billion. This marks a notable achievement, especially as the company also managed to post organic growth of 0.4%. Despite the challenging market conditions, they showcased resilience and adaptability.
Key Financial Highlights for 2024
Among notable financial outcomes, EBITDA before special items saw a slight decrease of 1.3%, totaling DKK 2.1 billion. The EBITDA margin stood at a respectable 22.6%, demonstrating the company’s effective cost management strategies. Furthermore, free cash flow before acquisitions contributed DKK 0.9 billion to their financial stability, showcasing the efficiency of their operations. Investors will be pleased to hear about the Board's proposal to increase the ordinary dividend per share to DKK 8.50, which reflects the company’s commitment to return value to its shareholders.
Fourth Quarter Breakdown
In the fourth quarter, Scandinavian Tobacco Group A/S reported a net sales increase of 8.0%, with figures reaching DKK 2.5 billion. However, it is crucial to note that organic net sales growth reported a slight decline of 1.0%. This decline was influenced by the discontinuation of third-party NGP product distribution in their online business, alongside reduced sales of handmade cigars in the U.S. Nevertheless, the introduction of the nicotine pouch brand, XQS, was a standout success as it continued to drive double-digit growth.
Growth Enablers and Market Adaptation
Throughout the year, the company’s focus on growth enablers paid off, accounting for 10% of group net sales. Their continuous investment in machine-rolled cigars, coupled with the strategic withdrawal from less profitable business segments, has geared the company towards a stronger market position. The improvement in EBITDA margin during the fourth quarter was largely credited to a favorable product mix, particularly from strong performance in the smoking tobacco category.
CEO Insights on Future Strategies
CEO Niels Frederiksen expressed optimism about their strategies during a year filled with challenges and volatility. He emphasized the significance of reaching net sales exceeding DKK 9 billion for the first time while maintaining a solid EBITDA margin. The Growth Enablers strategy and the updates to their product portfolio have positioned the company for ongoing success as it navigates market dynamics.
Financial Expectations for 2025
Looking into 2025, Scandinavian Tobacco Group A/S anticipates net sales in the range of DKK 9.2-9.7 billion. The full-year impact from their acquisition of Mac Baren is expected to enhance their revenue streams. However, the discontinued NGP distribution and divestment of specific business lines might pose challenges in achieving higher sales. The company has set its sights on an EBITDA margin projected between 20-23%, with free cash flow before acquisitions estimated between DKK 0.8-1.1 billion. Adjusted EPS is expected to fall within the DKK 11.0-14.0 range, reflecting their ongoing commitment to operational efficiency and shareholder returns.
Connect with Us
For any further inquiries or detailed information, please feel free to reach out to:
Torben Sand, Director of IR & Communications, 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 offering deeper insights into the results will be held soon. Details surrounding this event will be available on our investor page.
Frequently Asked Questions
What were the key financial results for Scandinavian Tobacco Group in 2024?
Scandinavian Tobacco Group reported net sales of DKK 9.2 billion, with a slight decrease in EBITDA to DKK 2.1 billion, marking a 22.6% margin.
How much is the proposed dividend per share for 2024?
The Board has proposed a dividend of DKK 8.50 per share, representing a 1.2% increase from the previous year.
What were the main challenges faced by the company in 2024?
The company navigated a volatile business environment, including a downturn in handmade cigars sales and the discontinuation of certain product distributions.
How did the fourth quarter performance differ from the full year?
While fourth-quarter sales surged by 8.0%, organic growth faced a small decline of 1.0% due to specific market shifts and discontinued product lines.
What are the expectations for 2025?
Scandinavian Tobacco Group anticipates net sales between DKK 9.2-9.7 billion and a projected EBITDA margin of 20-23% as they capitalize on growth strategies.
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