In This Article:
Company Announcement
No. 11/2025
Copenhagen, 20 May 2025
Interim report, 1 January - 31 March 2025
Scandinavian Tobacco Group A/S Reports First Quarter 2025 Results and Adjusts Expectations for Full Year 2025.
Scandinavian Tobacco Group´s reported net sales for the first quarter 2025 increased 1.3% to DKK 2.0 billion with a negative organic net sales growth of 8.8%. EBITDA before special items decreased 5.3% to DKK 317 million with an EBITDA margin of 16.1%. Free cash flow before acquisitions was DKK 156 million and the adjusted EPS were DKK 1.5.
The reported net sales growth was driven primarily by the addition of the Mac Baren business and high double-digit growth in our XQS nicotine pouch brand. Organic net sales decline was impacted by lower consumption of handmade cigar sales in the US and by discontinuation of online distribution of ZYN in the US. Temporary supply issues related to the go-live of SAP in our European factories phased some machine-rolled cigar sales from the first to later quarters.
The EBITDA margin decreased 1%-points compared with the first quarter of last year. The decline is driven by a combination of product and market mix, investments in re-gaining market shares in machine-rolled cigars in key European markets as well as the expansion of our nicotine pouch business.
First Quarter 2025
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Reported net sales increased by 1.3% to DKK 2.0 billion (DKK 1.9 billion)
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Organic net sales growth was -8.8%
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Growth Enablers accounted for 10% of Group net sales
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EBITDA before special items was DKK 317 million (DKK 335 million)
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EBITDA margin was 16.1% (17.2%)
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Adjusted EPS were DKK 1.5 (DKK 1.8)
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Free cash flow before acquisitions was DKK 156 million (DKK -126 million).
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Return on Invested Capital (ROIC) was 8.8% (10.3%).
Adjusting the expectations for full year 2025
As consequence of the recent changes in U.S. international trade policy - announced in April and resulting in increased tariffs of currently 10% on imported goods - and due to the translation effect from a lower U.S. dollar exchange rate, Scandinavian Tobacco Group is adjusting its financial expectations for the full year 2025. Despite a weak first quarter, the underlying business trends, as communicated in the March results announcement, remain largely unchanged. However, uncertainty related to US consumer sentiment, down trading and retailer decisions on inventory has increased.
The U.S. market accounts for approximately 45% of the Group’s net sales. Since the release of the 2025 financial outlook on 6 March, the U.S. dollar has depreciated by nearly 5% against the Danish krone. This negative translation effect on reported figures is partially offset by price adjustments introduced in response to the tariff increases.