Scandinavian Tobacco Group (STG) Q4 2024 earnings summary

Executive summary

• Net sales reached DKK 9.2 billion in 2024, up 5.4% year-over-year, driven by the Mac Baren acquisition and growth enablers, despite challenging market conditions and declining core cigar markets.

• EBITDA before special items was DKK 2,079 million, margin 22.6%, within guidance but down year-over-year due to investments in growth and market position.

• Net profit declined 20.5% to DKK 940 million, with adjusted EPS at DKK 13.7.

• Returned nearly DKK 1.5 billion to shareholders via dividends and buybacks.

• Advanced sustainability initiatives, including a 7.7% reduction in Scope 1 & 2 emissions (excluding Mac Baren) and SBTi validation.

Financial highlights

• Net sales: DKK 9,202 million (2023: DKK 8,731 million), up 5.4% year-over-year.

• EBITDA before special items: DKK 2,079 million, margin 22.6% (2023: 24.1%).

• Free cash flow before acquisitions: DKK 931 million for the year.

• Adjusted EPS for the quarter increased 5% to DKK 3.8; net profit declined to DKK 221 million due to higher special costs and taxes.

• Special costs of DKK 148 million in Q4 related to Mac Baren integration, ERP implementation, and reorganization.

Outlook and guidance

• 2025 net sales expected at DKK 9.2–9.7 billion, with EBITDA margin guidance of 20%–23%.

• Free cash flow projected at DKK 800 million–1.1 billion, impacted by up to DKK 300 million CapEx and DKK 200 million in special costs.

• Adjusted EPS guidance: DKK 11–14.

• Market for machine-rolled cigars in Europe expected to decline 3–4%; U.S. handmade cigar consumption to decline 2–3%.

• Guidance ranges are broader than usual due to high macroeconomic and geopolitical uncertainty.