Scandinavian Tobacco Group A/S Reports Interim Results
Company Announcement No. 14/2025
Copenhagen — Scandinavian Tobacco Group A/S has recently shared their interim report for the period ending on June 30, 2025. The results reflect a mixed performance within a challenging market landscape.
Second Quarter Performance Overview
For the second quarter of 2025, the company reported net sales of DKK 2.4 billion. However, this marks a 4% dip in organic net sales, indicating pressures in specific sectors. EBITDA before special items stood at DKK 499 million, reflecting an EBITDA margin of 21.1%, down from 24.5% from the previous year.
A noteworthy factor is that the addition of the Mac Baren business contributed positively to the reported net sales, although adverse exchange rate movements have negatively impacted growth. Excluding certain factors such as the discontinuation of distribution of ZYN in the U.S. and lower sales from contract manufacturing, organic growth remained stagnant.
Though challenges persist, there are bright spots in specific product categories. Handmade Cigars, Machine-Rolled Cigars, and Smoking Tobacco indicated recovery, while the nicotine pouch brand XQS boasted continued double-digit growth.
Key Financial Highlights for Q2 2025
- Reported net sales decreased slightly by 0.2%, remaining steady at DKK 2.4 billion.
- The organic net sales growth was negative by 4.1%
- EBITDA margin before special items was reported at 21.1%
- Adjusted EPS was DKK 3.3
- Free cash flow before acquisitions totaled DKK 119 million.
First Half 2025 Financial Summary
In the first six months of 2025, reported net sales experienced a marginal increase of 0.5%, totaling DKK 4.3 billion. However, the organic net sales growth was negative by 6.3%. The EBITDA margin before special items dropped to 18.8%, accompanied by adjusted EPS of DKK 4.7.
Despite the decline in margin compared to 2024, CEO Niels Frederiksen expressed confidence in the company's strategic direction. He highlighted that, although facing varying geopolitical and economic pressures, the integration of Mac Baren is anticipated to foster substantial growth, and the company is working towards achieving a free cash flow aim of DKK 800-1,000 million before acquisitions this year.
Future Financial Outlook
Scandinavian Tobacco Group has reaffirmed its financial expectations for the full year 2025. The company aims for reported net sales between DKK 9.1-9.5 billion, an EBITDA margin before special items of 18-22%, and free cash flow before acquisitions projected between DKK 0.8-1.0 billion. Adjusted EPS is anticipated to be in the range of DKK 10-13.
Acknowledging the uncertainties in the marketplace, including consumer behavior and pricing dynamics for handmade cigars in the U.S., the company remains cautiously optimistic about performance trends.
Conclusion and Continued Commitment
CEO Niels Frederiksen has addressed the community with assurances regarding the strategic direction for the next five years, indicating that updates will be shared as they progress. Upcoming conference calls will provide additional insights into the company’s plans and market conditions.
Frequently Asked Questions
What is the overall performance of Scandinavian Tobacco Group for Q2 2025?
Scandinavian Tobacco Group reported a slight decrease in net sales with a notable challenge in organic growth metrics; however, there were positive contributions from specific product segments.
How did Mac Baren's acquisition impact the second-quarter results?
The integration of Mac Baren contributed positively to reported net sales, though challenges like exchange rate fluctuations were felt in growth.
What are the financial expectations for the remainder of 2025?
The company expects to maintain reported net sales between DKK 9.1-9.5 billion and free cash flow of DKK 0.8-1.0 billion for the full year.
What factors could affect future performance?
Uncertainties in market behavior, pricing strategies, and geopolitical elements could significantly influence the company's performance moving forward.
How can investors reach out for more information?
For inquiries, investors can contact Torben Sand or Eliza Dabbagh, whose contact details have been provided in the announcement.
