Scandinavian Tobacco Group (STG) Q1 2025 earnings summary

Executive summary

• Q1 2025 reported net sales grew 1.3% to DKK 2.0 billion, mainly from the Mac Baren acquisition and XQS growth, but organic net sales declined 8.8% due to discontinued ZYN distribution and lower US handmade cigar sales.

• EBITDA margin before special items fell by 1 percentage point to 16.1%, impacted by lower cigar sales, product mix changes, and continued investment in growth initiatives.

• Adjusted EPS was DKK 1.5, down from DKK 1.8, and net profit dropped to DKK 52 million.

• Free cash flow before acquisitions improved to DKK 156 million, driven by working capital changes.

• DKK 8.50 per share dividend distributed in April 2025.

Financial highlights

• Q1 2025 net sales: DKK 1,974 million, up 1.3% year-over-year, with Mac Baren contributing 8.5% and FX 1.6%, but organic net sales declined 8.8%.

• EBITDA before special items: DKK 317 million (Q1 2024: DKK 335 million); margin at 16.1% (down from 17.2%).

• Net profit: DKK 52 million (Q1 2024: DKK 125 million); adjusted EPS: DKK 1.5 (Q1 2024: DKK 1.8).

• Free cash flow before acquisitions: DKK 156 million (Q1 2024: -DKK 126 million).

• Special costs of DKK 70 million incurred for SAP implementation, Mac Baren integration, and reorganizations.

Outlook and guidance

• 2025 net sales guidance revised to DKK 9.1–9.5 billion (previously DKK 9.2–9.7 billion), reflecting FX and tariff headwinds.

• EBITDA margin guidance widened to 18–22% (previously 20–23%), reflecting increased uncertainty.

• Free cash flow before acquisitions expected at DKK 0.8–1.0 billion (previously up to DKK 1.8 billion).

• Adjusted EPS guidance lowered to DKK 10–13 per share (previously up to DKK 14).

• Guidance assumes no new acquisitions and current exchange rates; a 10% USD/DKK change would impact net sales by ~5 percentage points.