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Company Announcement
No. 47/2024

 Copenhagen, 22 August 2024

Interim report, 1 January - 30 June 2024

Scandinavian Tobacco Group A/S reports second quarter 2024 results and maintains full-year guidance
 

For the second quarter of 2024 Scandinavian Tobacco Group delivered a 6.3% increase in reported net sales by DKK 2.4 billion with an EBITDA margin before special items at 24.5%. Net sales increased 4.8% organically driven by Handmade Cigars and Next Generation Products. The decline rate in Machine-Rolled Cigars & Smoking Tobacco improved compared with the first quarter. The EBITDA margin is impacted by an improving, yet still negative, volume development, mix changes and investments in growth. In the second half of the year, the Group is expected to deliver organic net sales growth and a continued improvement in the EBITDA-margin.  The full year guidance is maintained.

Second Quarter 2024 - Financial Performance

• Net sales of DKK 2,366 million (DKK 2,225 million) with 4.8% positive organic growth.

• EBITDA before special items was DKK 580 million (DKK 514 million) with an EBITDA margin of 24.5% (23.1%).

• Adjusted Earnings Per Share (EPS) were DKK 4.1 (DKK 3.5).

• Free cash flow before acquisitions was DKK 177 million (DKK 159 million).

• Return on Invested Capital (ROIC) was 10.5% (13.1%).

• Growth Enablers delivered a high double-digit growth rate and accounted for 12% of Group net sales.

• In the first six months of 2024, net sales increased by 3.0% to DKK 4.3 billion (DKK 4.2 billion), organic net sales growth was 1.5%, the EBITDA margin was 21.2% (23.6%), free cash flow before acquisitions was DKK 52 million (DKK -20 million) and Adjusted EPS were DKK 5.8 (DKK 6.7).

CEO Niels Frederiksen: “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 and to safeguard our financial performance in challenging markets. The new commercial structure has been completed and we have taken additional steps to re-establish our market position in machine-rolled cigars and to improve our cost agility across the group. Further, the acquisition of Mac Baren strengthens our smoking tobacco business where the combination with our existing business will deliver meaningful synergies and good value for our shareholders”.  

Acquisition of Mac Baren  

With effect from 1 July 2024, Scandinavian Tobacco Group has acquired Mac Baren Tobacco Company A/S (“Mac Baren”) in a transaction valued at DKK 535 million. Mac Baren is a leading global smoking tobacco company, which includes a strong portfolio of pipe tobacco brands, fine-cut tobacco brands and brands within the nicotine pouch category. Mac Baren adds a valuable portfolio of brands within the smoking tobacco category, increases our presence in the nicotine pouch market and contributes to improved financial results.