Scandinavian Tobacco Group (STG) Q4 2025 earnings summary

Executive summary

• 2025 was challenging due to external disruptions, tariffs, and internal operational issues, especially impacting the handmade cigar business in the U.S. and machine-rolled cigars globally, with a focus on protecting market positions and integrating Mac Baren.

• The Focus2030 strategy was launched, prioritizing stabilization of core businesses, growth in handmade cigars and nicotine pouches, and improved ROIC, EBIT, and free cash flow over five years.

• Despite headwinds, results were broadly in line with revised expectations, with net sales of DKK 9.036 billion and EBITDA margin before special items at 19.8%.

• Integration of Mac Baren and SAP/ERP implementation in Europe were key operational focuses, causing temporary disruptions but now resolved.

• 2026 is positioned as a year of stabilization and investment to support long-term ambitions.

Financial highlights

• Net sales: DKK 9.036 billion, down 1.8% year-over-year; Q4 net sales DKK 2.343 billion, down 5%.

• EBITDA margin before special items: 19.8% (down from 22.6% in 2024).

• Adjusted EPS: DKK 10.8 (down from DKK 13.7 in 2024).

• Free cash flow before acquisitions: DKK 595 million, impacted by delayed receivables from ERP rollout; underlying FCF above DKK 800 million.

• Net profit for 2025 was DKK 669 million, down from DKK 940 million in 2024.

Outlook and guidance

• 2026 net sales growth expected at -2% to +2% at constant currencies.

• EBIT margin before special items guided at 13–14.5% (vs. 14.9% in 2025).

• Free cash flow before acquisitions expected at DKK 950 million–1.2 billion, aided by normalization of working capital.

• Adjusted EPS guidance for 2026 is DKK 9–11.

• Continued investment in market share and promotional activities expected to pressure margins.