Scandinavian Tobacco Group A/S Reports Second Quarter 2024 Results
Company Announcement No. 47/2024
Scandinavian Tobacco Group A/S has announced impressive financial results for the second quarter of 2024, showing a 6.3% rise in reported net sales, which reached DKK 2.4 billion. The EBITDA margin before special items was recorded at 24.5%. The company saw an organic net sales growth of 4.8%, largely driven by its Handmade Cigars and Next Generation Products. Although there was a decline in Machine-Rolled Cigars and Smoking Tobacco, improvements were noted compared to previous quarters.
Second Quarter 2024 Financial Highlights
This quarter highlighted several important financial metrics that underscore Scandinavian Tobacco Group's strong market performance:
- Net sales reached DKK 2,366 million, up from DKK 2,225 million, reflecting a 4.8% organic growth.
- EBITDA before special items increased to DKK 580 million from DKK 514 million, resulting in an improved EBITDA margin of 24.5%, up from 23.1%.
- Adjusted Earnings Per Share (EPS) rose to DKK 4.1, compared to DKK 3.5 in the previous period.
- Free cash flow before acquisitions amounted to DKK 177 million, an increase from DKK 159 million.
- Return on Invested Capital (ROIC) was recorded at 10.5%, a slight decline from 13.1% in the previous period.
- The Growth Enablers segment showed a robust double-digit growth rate, contributing to 12% of total 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 his optimism about the financial results, stating, "The financial performance in the second quarter reinforces our expectations for the full year. Over the past months, we have made significant strides in executing our strategy to protect our financial performance in challenging markets. We have completed the new commercial structure, and our aim is to regain our position in the machine-rolled cigar market while improving cost agility across the group. Our acquisition of Mac Baren is intended to bolster our tobacco business and create meaningful synergies, ultimately enhancing shareholder value.”
Acquisition of Mac Baren Tobacco Company
As of July 1, 2024, Scandinavian Tobacco Group successfully acquired Mac Baren Tobacco Company A/S for DKK 535 million. Mac Baren is a leading player in the global smoking tobacco market, with a strong portfolio that includes pipe tobacco brands, fine-cut tobacco brands, and products in the nicotine pouch category. This acquisition not only expands the company’s brand offerings in the smoking tobacco segment but also strengthens its presence in the nicotine pouch market, positively impacting future financial prospects.
Financial Guidance for 2024
The company’s financial guidance for 2024 remains consistent, with the following projections:
- Expected net sales are projected to be between DKK 8.8 billion and DKK 9.1 billion.
- The target EBITDA margin before special items is set to be between 22% and 24%.
- Free cash flow before acquisitions is anticipated to fall between DKK 0.8 billion and DKK 1.0 billion.
- Adjusted EPS is expected to range from DKK 12.5 to DKK 14.5.
It is essential to note that this financial guidance does not include the impact of the Mac Baren acquisition. The financial implications of this acquisition will be disclosed once the integration planning phase is complete, and no later than during the third quarter interim report.
Contact Information
For any inquiries, please reach out to:
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.
