Scandinavian Tobacco Group A/S reports third quarter 2024 results and includes Mac Baren in full-year guidance

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Scandinavian Tobacco Group A/S
Scandinavian Tobacco Group A/S

Company Announcement
No. 61/2024

Copenhagen, 12 November 2024

Interim report, 1 January - 30 September 2024

Scandinavian Tobacco Group A/S reports third quarter 2024 results and includes Mac Baren in full-year guidance
 

For the third quarter of 2024 Scandinavian Tobacco Group delivered a 7.1% increase in reported net sales to DKK 2.4 billion (DKK 2.3 billion) with an EBITDA margin before special items at 23.4% (26.5%). In a like-for-like comparison and excluding exchange rate developments, organic net sales decreased by 0.1%. Discontinuation of distribution of third-party nicotine pouches in the US impacted growth negatively by 1.0%. Growth in Machine-Rolled Cigars & Smoking Tobacco and Next Generation Products was partly offset by a decline in Handmade Cigars and accessories. The Next Generation Product (“NGP”) brand XQS increased 72%, though the absence of the mentioned distribution of nicotine pouches reduced category growth to 2%.

The expected decrease in the EBITDA margin was a result of our investment to support growth of our own NGP portfolio, especially the XQS brand; the currently lower profitability in Mac Baren, which has been consolidated from 1 July 2024, and the comparison to a very strong third quarter 2023. In the fourth quarter of the year the Group is expected to deliver slightly declining organic net sales growth and an unchanged EBITDA-margin compared with the fourth quarter of last year.

The integration of Mac Baren is expected to deliver synergies annually in the level of DKK 150 million with full effect in the financial year 2027. Special costs with cash impact to reach the targeted cost synergies are estimated at the level of 150 million.

Third Quarter 2024 - Financial Performance

  • Net sales of DKK 2,431 million (DKK 2,269 million) with 0.1% negative organic growth.

  • EBITDA before special items was DKK 568 million (DKK 602 million) with an EBITDA margin of 23.4% (26.5%).

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

  • Free cash flow before acquisitions was DKK 275 million (DKK 622 million).

  • Return on Invested Capital (ROIC) was 9.8% (12.9%).

  • Growth Enablers delivered a double-digit growth rate and accounted for 9% of Group net sales (8%).

  • Mac Baren delivered net sales of DKK 159 million with EBITDA before special items at DKK 30 million and an EBITDA margin before special items of 18.8%.

  • In the first nine months of 2024, net sales increased by 4.5% to DKK 6.7 billion (DKK 6.5 billion), organic net sales growth was 0.9%, the EBITDA margin was 22.0% (24.6%), free cash flow before acquisitions was DKK 327 million (DKK 602 million) and Adjusted EPS were DKK 9.9 (DKK 10.8).