Scandinavian Tobacco Group A/S: Annual Report 2024

Company Announcement
No. 2/2025

Copenhagen, 6 March 2025

Full-year report, 1 January - 31 December 2024

Scandinavian Tobacco Group A/S Reports Full Year 2024 Results and Proposes a DKK 8.50 Dividend Per Share

Scandinavian Tobacco Group´s reported net sales for the full year increased 5.4% to DKK 9.2 billion in 2024 with an organic growth of 0.4%. EBITDA before special items decreased 1.3% to DKK 2.1 billion with an EBITDA margin of 22.6%. Free cash flow before acquisitions was DKK 0.9 billion and the adjusted EPS were DKK 13.7. The Board of Directors will propose a 1.2% increase in the ordinary dividend per share to DKK 8.50.

For the fourth quarter reported net sales increased 8.0% to DKK 2.5 billion with an organic growth of -1.0%. EBITDA before special items increased 15.4% with an EBITDA margin of 24.3%. Free cash flow before acquisitions was DKK 0.6 billion.

The organic growth in net sales was in the fourth quarter impacted by the discontinued distribution of third-party NGP products in our online business and a decrease in handmade cigars in the US. The sales of our nicotine pouch brand XQS continued to deliver double-digit growth, and the product category Machine-Rolled Cigars & Smoking Tobacco delivered low single-digit growth.

The improvement in the EBITDA margin in the fourth quarter compared with 2023 was driven by favourable mix, in particular strong performance in smoking tobacco. Investments in our growth enablers and in machine-rolled cigars as well as the discontinued NGP-distribution business impacted margins negatively.

CEO Niels Frederiksen: “2024 was another challenging year with a volatile business environment, but for the first time, we reported net sales exceeding DKK 9 billion and an EBITDA margin of 22.6% in a period where we invest in both our Growth Enablers and in the turnaround of our core machine-rolled cigar business. We returned DKK 1.5 billion to shareholders in 2024 and we propose a dividend payment of DKK 8.50 per share being the ninth consecutive year with an increase in the ordinary dividend.

We are pleased with the progress we have achieved on the objectives set out in the five-year strategy - Rolling Towards 2025. Since its launch in 2020, we have added strong brands in both the US and in Europe, expanded our product portfolio to next generation products and launched an updated sustainability strategy. We have made multiple acquisitions; our Growth Enablers have gained traction, and we are creating a stronger platform with our many efforts within IT and digitalization. We are making good progress on creating a solid platform from which we can grow further”.

Fourth Quarter 2024

• Reported net sales increased by 8.0% to 2.5 billion (DKK 2.3 billion)
• Organic net sales growth was negative at 1.0%
• Growth Enablers accounted for 10% of Group net sales.
• EBITDA before special items was DKK 596 million (DKK 517 million)
• The EBITDA margin was 24.3% (22.7%)
• Adjusted Earnings Per Share (EPS) were DKK 3.8 (DKK 3.6).
• Free cash flow before acquisitions was DKK 604 million (DKK 452 million).

Full year 2024

• Reported net sales increased by 5.4% to DKK 9.2 billion (DKK 8.7 billion)
• Organic net sales growth was 0.4%

• Growth Enablers accounted for 10% of Group net sales

• EBITDA before special items was 2.1 billion (2.1 billion)
• EBITDA margin was 22.6% (24.1%)
• Adjusted EPS were DKK 13.7 (DKK 14.4)
• Free cash flow before acquisitions was DKK 931 million (DKK 1,053 million).

• Return on Invested Capital (ROIC) was 9.4% (11.4%).

Financial expectations 2025

Reported net sales in 2025 will be positively impacted by the full year impact from the Mac Baren acquisition, whereas reported net sales will be negatively impacted by the discontinued NGP-distribution business as of the third quarter 2024 and the divestment of a smaller lighters business in France. Continued investments in both our Growth Enablers and in turning around our machine-rolled cigar business impact margins negatively, though being partly offset by synergies from the Mac Baren integration. Our expectations for 2025 are:

• Reported net sales in the range of DKK 9.2-9.7 billion
• EBITDA margin before special items in the range of 20-23%
• Free cash flow before acquisitions in the range DKK 0.8-1.1 billion
• Adjusted EPS in the range of 11.0-14.0.

For further information, please contact:
Torben Sand, Director of IR & Communication, phone +45 5084 7222, torben.sand@st-group.com.
Eliza Dabbagh, IR & Communications, phone +45 5080 7619, eliza.michael@st-group.com.

A conference call will be held on 7 March 2025 at 10.00 CEST. Dial-in information and an accompanying presentation will be available at investor.st-group.com/investor around 09:00 CEST.

Attachments

• STG Annual Report 2024
• 5299003KG4JS99TRML67-2024-12-31-en
• Interim report Q4 2024