XCSE:STG ESEF Annual Report
SCANDINAVIAN TOBACCO GROUP A/S (XCSE:STG)
ESEF Annual Report
2026-05-27
For: 2026-03-31
View Original
Added on
September 22, 2026
Company Announcement No. 6, 20 May 2026
Interim Report First Quarter 2026: Steady progress in a seasonally low quarter
Niels Frederiksen, Chief Executive Officer: “The first quarter marks the beginning of our new five-year strategy,
Focus2030. Our priority this year is to lay the foundation for long-term success by stabilising our earnings in
machine-rolled cigars and smoking tobacco, revitalising our strong handmade cigar business and continuing to
expand our promising nicotine pouch business. I am pleased with the progress we have made in the early months
of the year as we have executed on our initial plans, and I am confident we will achieve our financial ambitions as
well as delivering attractive, sustainable shareholder value during the next five years”.
Net sales stabilising as Focus2030 initiatives implemented
• Reported net sales of DKK 1.9 billion includes a -5.2% impact from exchange rate changes
• Net sales growth at constant currencies of -0.6% impacted by timing of deliveries
• Power brands lead market share stabilisation in machine-rolled cigars across Europe
• XQS continues to strengthen in growing market. Market share in Sweden above 13%
• Handmade cigars deliver organic net sales growth of 8%
EBIT margin in line with last year
• EBITDA margin before special items was 17.2% (Q1 2025: 16.1%)
• EBIT margin before special items at 10.4% (Q1 2025: 10.4%) negatively impacted by 0.9% from change
in amortization of trademarks
Traditionally low first quarter cash flow positively impacted by recovery of receivables
• Free cash flow before acquisitions was DKK 158 million (Q1 2025: DKK 156 million). The cash flow last
year was unusually strong as result of a positive impact from working capital.
• The cash flow benefitted as expected from the recovery of receivables. Typically, the cash flow genera-
tion is the weakest during the first quarter.
Financial expectations for full-year 2026 maintained
For 2026, we expect total market trends to be similar to what we have seen over the past years for most of our
product categories and with profit margins continuing to be impacted by changes in product and market mix and
competitive pressures. Reported net sales growth at constant currencies is expected in the range from -2% to
2%, EBIT margin before special items in the range of 13.0%-14.5%, free cash flow before acquisitions in the range
DKK 950-1,200 million and adjusted EPS in the range DKK 9-11. EBITDA before special items is expected to be
more or less unchanged compared to last year.
Financial Summary
Reported data in DKK million
Q1 2026
Q1 2025
Change
Net sales
1,859
1,974
-6%
EBITDA before special items
320
317
1%
EBIT before special items
193
206
-6%
EBIT margin before special items
10.4%
10.4%
Adjusted earnings per share (DKK)
1.1
1.5
-27%
Free cash flow before acquisitions
158
156
1%
Return on invested capital (ROIC)
7.8%
8.8%
NIBD / EBITDA before special items
3.0x
2.5x
Scandinavian Tobacco Group will present its First Quarter 2026 results at a conference call on 21 May 2026 at
10.00 CEST. Dial-in information and the presentation deck will be available at st-group.com.
Contact
Torben Sand, Director of IR & Communications, phone +45 5084 7222, [email protected].
Eliza Dabbagh, IR & Communications, phone +45 2420 8812, eliza.michael@st-group.com
2
Key Figures
DKK million
Q1 2026
Q1 2025
12M 2025
INCOME STATEMENT
Net sales
1,859
1,974
9,036
Gross profit before special items
824
867
4,001
EBITDA before special items
320
317
1,791
EBIT before special items
193
206
1,342
Special items
-76
-70
-200
EBIT
117
136
1,142
Net financial items
1
-66
-73
-288
Profit before tax
56
67
878
Income taxes
-13
-15
-208
Net profit
43
52
669
BALANCE SHEET
Total assets
16,386
16,691
16,303
Equity
8,712
9,071
8,572
Net interest-bearing debt (NIBD)
5,370
5,244
5,461
Investment in property, plant and equipment
19
23
158
Total capital expenditures
28
27
182
CASH FLOW STATEMENT
Cash flow from operating activities
147
177
755
Cash flow from investing activities
12
-26
-163
Free cash flow
158
152
591
Free cash flow before acquisitions
158
156
595
KEY RATIOS
2
Net sales growth
-5.8%
1.3%
-1.8%
Organic net sales growth
-0.6%
-8.8%
-3.1%
Gross margin before special items
44.3%
43.9%
44.3%
EBITDA margin before special items
17.2%
16.1%
19.8%
EBIT margin before special items
10.4%
10.4%
14.9%
Effective tax percentage
23.0%
23.0%
23.7%
Equity ratio
53.2%
54.3%
52.6%
Cash conversion
108.9%
139.1%
99.3%
NIBD / EBITDA before special items
3.0
2.5
3.0
ROIC
7.8%
8.8%
7.9%
ROIC ex. Goodwill
12.4%
13.8%
12.3%
Adjusted earnings per share (DKK)
1.1
1.5
10.8
Basic earnings per share (DKK)
0.6
0.7
8.5
Diluted earnings per share (DKK)
0.5
0.7
8.5
Number of shares issued ('000)
80,000
86,000
80,000
Number of treasury shares ('000)
1,253
7,266
1,253
Number of outstanding shares ('000)
3
78,858
78,839
78,828
Share price at balance date (DKK)
68.10
100.60
95.50
Dividend per share (DKK)
4.50
Pay-out ratio
41.7%
1. Excl. share of profit of associated companies.
2. See definition/explanation of financial ratios in note 5.8 in the Annual Report 2025.
3. Average number of shares outstanding, including dilutive effect of PSUs.
3
Driving value through focus and execution
Focus2030 is the foundation for delivering on our financial ambitions
We focus on three strategic priorities, which are the critical keys to unlock the full potential of the
Group. By 2030, we aim to have created a company that has:
• A sustainable and stable machine-rolled cigars and smoking tobacco business
• A growing and increasingly attractive handmade cigar business anchored in the US, but with
a growing international platform
• A bigger nicotine pouch business with even more upside in an attractive category
An essential part of Focus2030 is to create value for our shareholders by delivering on our financial
ambitions for the five-year period. We will have accomplished these ambitions in 2030 when we have
delivered:
• A return on invested capital (ROIC) of more than 11% compared with 7.9% in 2025
• A low single digit organic compounded annual growth rate in EBIT before special items
• A free cash flow generation before acquisitions of more than DKK 1.2 billion
Acquisitions as well as divestments of less core assets will continuously be evaluated, assuming these
potential transactions support our strategy as well as our financial ambitions.
Building the foundation for stabilising machine-rolled cigars
Scandinavian Tobacco Group is the European market leader in machine-rolled cigars, however market
share and production volumes have declined in recent years, negatively impacting our profits. Fo-
cus2030 emphasises the need to protect our strongholds while expanding our market shares in key
markets. In addition, we aim to optimise our supply chain through simplification.
To offset the structural volume decline in the machine-rolled cigars category, it is key to secure market
share gains and optimize price management. Mitigating structural market trends through intensified
market share focus is reflected in the category’s five-year ambition. We aim to increase volume market
share in key European machine-rolled cigar markets from below 27% in 2025 to more than 29% in
2030. Additionally, we aim to grow net sales of the four power brands, Signature, La Paz, Mehari´s
and Panter faster than the overall category growth.
As part of Focus2030, we have in this quarter rebranded our power brand, Mehari’s. To celebrate the
brand’s 50th anniversary, Mehari’s has been given an upgraded packaging design that reflects the
quality and craftsmanship behind every cigarillo with the aim to strengthen relevancy amongst con-
sumers by reviving its spirits of adventure and historical reputation.
Preliminary total market data for the first quarter 2026 show that in the seven key European markets
machine-rolled cigars volumes declined by 1.5% compared to the first quarter in 2025. The preliminary
data indicates that our volume market share improved to 27.9% in the quarter compared with 27.0%
in the first quarter last year.
Data for the last twelve months, i.e. from April 2025 to March 2026, indicates a total market decline of
1%. Our volume market share was 27.0% compared with 27.7% in the previous twelve-month period.
The three power brands Signature, Mehari´s and La Paz increased market share and the four power
brands, including Panter, accounted for about 78% of category volumes.
It should be noted, the underlying development in total markets and our market share performance
best can be evaluated over a longer time perspective as volatility in quarterly data can be high. Our
4
first quarter 2026 performance partially reflects that the first quarter last year was negatively impacted
by the implementation of the SAP system across European factories.
Own brands and retail stores leading the way in handmade cigars
Our handmade cigar business is anchored in the U.S. driven by our strong, diversified brand portfolio
and our direct-to-consumer business - within both online distribution and our expanding retail store
network. We aim to grow our handmade cigars business with the power brands, Cohiba/Silencio, CAO,
Macanudo and Alec Bradley, driving growth across our broad portfolio of brands that serves multiple
consumer segments and covers all price points.
Market share growth from about 13% to more than 15% will be the key driver for moving our US
handmade cigars business forward. We aim to leverage our strong online and expanding retail distri-
bution platforms to support the growth of our own brands and aim to grow the power brands faster
than the overall category. We also expect to grow our international sales of handmade cigars.
The first quarter is typically the smallest quarter of the year, and year-on-year comparisons may devi-
ate from underlying trends. However, the first quarter of 2026 saw a strong 8% organic growth in net
sales for the category with the strongest contributions from our own brands and our retail superstores.
Sales of handmade cigars were also positive in our online distribution business although at a lower
rate.
The power brands accounted for about 23% of the total category net sales which is at the same level
as it was in the full year of 2025. Both Cohiba and CAO delivered double-digit growth in the quarter.
Our solid start to the year reflects that our many good product introductions to the market have been
well received by the trade and consumers.
Net sales in nicotine pouch business temporarily affected by timing
The nicotine pouch category continues to show strong potential with the category outgrowing the gen-
eral tobacco and nicotine markets. In the Focus2030 strategy, we aim to build a stronger presence in
the category with our power brand, XQS. Our portfolio also consists of the smaller brands Ace and
Gritt, which became part of our Group in relation to the acquisition of the smoking tobacco company,
Mac Baren, in 2024.
Nicotine pouches accounts for about 5% of group net sales and is expected to deliver important con-
tributions to the Group’s growth in net sales and profits during the strategy period. We plan to build on
our established market position in Sweden, but also by expanding in other markets such as the UK
where our distribution capabilities and access to the market provide us an advantageous opportunity.
Net sales of nicotine pouches decreased by 23% during the quarter, however this was driven by timing
of deliveries into the trade and lower sales of Ace and Gritt.
During the quarter total market volumes in Sweden, Denmark and the UK increased by 21% with our
brands growing 38%. XQS´s market share in Sweden increased to 13.6% from 10.7% in the first quar-
ter of 2025. New formats for XQS Citrus Cooling Strong and XQS Blueberry Mint have performed
particularly well.
5
Stabilising financial performance as the first step in five-year journey
Return on invested capital, ROIC was 7.8% by the end of the first quarter compared with 7.9% by the
end of 2025. The last twelve months EBIT was DKK 1,123 million (DKK 1,142 million) and the last
twelve months average invested capital was DKK 14,343 million (DKK 14,482 million). Our ambition
to deliver a ROIC of more than 11% in 2030.
EBIT before special items increased organically by 0.9% compared with the first quarter last year partly
reflecting easy comparables. In 2026 the focus is to stabilise the financial performance and build the
foundation for delivering on the ambition to deliver a low-single digit CAGR in EBIT before special
items throughout the five-year strategy period.
The free cash flow before acquisition was DKK 158 million in the first quarter supporting our expecta-
tions for the full year. The ambition is to deliver more than 1.2 billion in free cash flow before acquisi-
tions in 2030.
The leverage ratio was 3.0 times by the end of the first quarter 2026, which is unchanged compared
with the end of the year 2025. The leverage is expected to be closer to our target ratio of 2.5 times by
the end of 2026.
Financial overview by product category
First Quarter 2026
Net
Sales
Organic
Growth
Gross
Margin*
Gross
Margin*
DKK million
Q1 2026
Q1 2025
Machine-rolled Cigars & Smoking Tobacco
956
-3%
52.8%
49.9%
Handmade Cigars
660
8%
41.2%
42.6%
Next Generation Products
64
-23%
35.2%
23.0%
Other
179
-10%
13.6%
27.5%
Total
1,859
-1%
44.3%
43.9%
“Other” includes contract manufacturing, sales of accessories and bar sales delivered.
*Before special items
Expectations for full-year 2026
The financial expectations for the year are unchanged.
Since the release of our Annual Report in March, we have experienced no material changes to the
underlying total market trends. Reported net sales growth at constant currencies are expected to be
in in the range -2% to +2% reflecting that total market volumes for machine-rolled cigars in Europe will
decline by 3% and the consumption of handmade cigars will decline by 4%.
Changes in consumer behaviour across our product categories are still considered to be the largest
uncertainty to the development in net sales and gross profit margins for the Group as the risk for
external disruptions remain high.
The EBIT margin before special items is expected in the range of 13.0%-14.5% compared with 14.9%
in 2025. The expectation reflects that 2026 will be a year of stabilisation and that we will continue
investing to facilitate our long-term ambitions in Focus2030.
The free cash flow before acquisitions is expected in the range of DKK 950-1,200 million reflecting the
expectations for net sales and margins as well as the delayed payments from trade receivables re-
turning in 2026 with a positive effect on cash flow during the first half of this year.
Adjusted earnings per share is expected in the range DKK 9-11.
6
We expect the leverage ratio will move towards our target ratio of 2.5 times during 2026 based on the
expectation of a more or less unchanged EBITDA before special items compared with last year.
Currency sensitivity
Reported net sales for the Group will be impacted by approximately five percentage points by a ten-
percentage point change in the USD/DKK exchange rate while the EBIT margins will only be marginally
impacted. Based on the exchange rates as of 20 May 2026, we assume a negative translation impact
for reported net sales of around DKK 150 million for full-year 2026.
Other relevant assumptions:
EBITDA before special items is expected to be more or less in line with full-year 2025, the reported
effective tax rate at 23-24%, special items of about DKK -275 million and special items with cash
impact of about DKK -275 million. Guidance and assumptions are based on no impact from potential
new acquisitions and/or divestments.
7
First Quarter - Group Financial performance
DKK million
Q1 2026
Q1 2025
12M
Net sales
1,859
1,974
9,036
Gross profit before special items
824
867
4,001
EBITDA before special items
320
317
1,791
EBIT before special items
193
206
1,342
Special items
-76
-70
-200
EBIT
117
136
1,142
Net financial items
-66
-73
-288
Profit before tax
56
67
878
Income taxes
-13
-15
-208
Net profit
43
52
669
Other key financial data
Organic net sales growth
-0.6%
-8.8%
-3.1%
Gross margin before special items
44.3%
43.9%
44.3%
EBITDA margin before special items
17.2%
16.1%
19.8%
EBIT margin before special items
10.4%
10.4%
14.9%
Free cash flow before acquisitions
158
156
595
Sales
Reported net sales at DKK 1.9 billion was 6% lower than last year impacted by exchange rates
developments by -5%. Organic net sales were down by 0.6% impacted by timing between the fourth
quarter 2025 and first quarter 2026 of nicotine pouches and machine-rolled cigars to the trade and
distributors.
For the three reporting divisions the organic net sales performance was 5% in North America Branded
& Rest of World (“NABROW”) and 2% in North America Online & Retail (“NAOR”) while Europe
Branded (“EUB”), declined by 9%.
Profits and Cash Flow
The gross profit before special items was DKK 824 million (DKK 867 million) with a gross margin before
special items improving to 44.3% (43.9%). The development was driven by improved margins in the
division Europe Branded, primarily within machine-rolled cigars.
EBITDA before special items increased 1% to DKK 320 million with an EBITDA margin before special
items of 17.2% compared with 16.1% in the same quarter last year. The OPEX ratio was to 28.7%
compared with 28.4% last year. EBIT before special items was DKK 193 million compared with DKK
206 million last year with an unchanged EBIT margin before special items at 10.4%. The EBIT margin
in the quarter was negatively impacted by 0.9%-points from change in amortization of trademarks.
EBIT before special items increased organically by 0.9% in the quarter compared with last year.
Special items were to DKK -76 million mainly relating to the SAP implementation project, “OneProcess”
which accounted for DKK 31 million and Focus 2030 reorganisations which accounted for DKK 33
million.
Net profit was DKK 43 million (DKK 52 million) with adjusted earnings per share at DKK 1.1 (DKK 1.5)
The Group’s free cash flow before acquisitions was DKK 158 million (DKK 156 million). The cash flow
in the quarter was positively impacted by the collection of receivables associated with our new SAP
implementation in Europe. The cash flow in the first quarter of 2025 was impacted by an unusual
positive change in working capital, which typically is negative in the first quarter of the year. The col-
lection of receivables follows the plan and is expected to be fully recovered in the second quarter of
2026.
8
Divisional Performance
Europe Branded
DKK million
Q1 2026
Q1 2025
12M
Net sales
630
687
3,270
Gross profit before special items
323
284
1,566
EBITDA before special items
115
66
649
Net sales growth
-8.4%
11.4%
5.8%
Organic net sales growth
-8.7%
-3.7%
-0.5%
Gross margin before special items
51.3%
41.3%
47.9%
EBITDA margin before special items
18.3%
9.6%
19.8%
During the first quarter reported net sales decreased by 8% compared to the same quarter last year
with immaterial impact from exchange rates. Organic net sales declined by 9%. The product category
Smoking Tobacco delivered mid-single-digit growth while our other product categories delivered a
negative net sales development during the quarter. Net sales were impacted by timing of deliveries of
nicotine pouches and machine-rolled cigars to the trade and distributors in Europe.
The gross margin before special items improved by 10.0%-points to 51.3% driven by changes in prod-
uct mix primarily as result of the net sales growth for smoking tobacco products and as profitability in
the first quarter 2025 was negatively impacted by low volumes in machine-rolled cigars. The EBITDA
margin before special items improved by 8.7%-points to 18.3%.
North America Branded & Rest of World
DKK million
Q1 2026
Q1 2025
12M
Net sales
655
668
3,017
Gross profit before special items
297
330
1,388
EBITDA before special items
201
210
938
Net sales growth
-1.9%
-2.0%
-3.9%
Organic net sales growth
4.5%
-13.0%
-4.9%
Gross margin before special items
45.3%
49.5%
46.0%
EBITDA margin before special items
30.7%
31.4%
31.1%
During the first quarter reported net sales decreased by 2% compared with last year with exchange
rates impacting reported growth negatively by more than 6%. Organic net sales growth was 5% with
the product categories Handmade Cigars, Machine Rolled-Cigars and Next Generation Products de-
livering growth while Smoking Tobacco delivered declining organic sales.
The gross margin before special items was 45.3% (49.5%) and the EBITDA margin before special
items was 30.7% (31.4%). The decline in profitability reflects the changes in product mix with high
margin smoking tobacco contributing with a lower proportion of divisional net sales.
9
North America Online & Retail
DKK million
Q1 2026
Q1 2025
12M
Net sales
575
619
2,749
Gross profit before special items
204
252
1,046
EBITDA before special items
45
74
347
Net sales growth
-7.1%
-4.9%
-7.5%
Organic net sales growth
2.8%
-9.6%
-4.1%
Gross margin before special items
35.6%
40.8%
38.1%
EBITDA margin before special items
7.8%
11.9%
12.6%
During the first quarter reported net sales in NAOR decreased by 7% compared to last year with ex-
change rates impacting reported growth negatively by close to 10%. Organic net sales growth was 3%
as result of a low double-digit growth in NA Retail, driven by store openings, and low single-digit growth
in NA Online.
Competition remains fierce in the online channel. However, NA Online has increased its market share
of the online market. Retail same-store-sales was slightly positive despite poor weather conditions
during the quarter.
The gross margin before special items was 35.6% (40.8%) and the EBITDA margin before special
items was 7.8% (11.9%). The development reflects the continued high promotional activity in the online
business to gain market share and the challenges with passing on tariff induced costs fast enough to
consumers. The first quarter is typically the quarter of the year with the lowest EBITDA margins.
10
No changes to potential claim by Belgian tax authorities
Scandinavian Tobacco Group has disposed tobacco waste without respecting the correct formalities.
This is currently being audited by the Belgian customs and excise authorities and there is a risk that
they will require the Group to pay excise duties as if the waste had been sold on the market plus
penalties and interest.
The Group is confident it can demonstrate that the waste has been destroyed and there is no risk of it
having been sold on the market. Based on this, the Group does not consider it is liable for excise taxes.
However, the outcome of the case is uncertain based on Belgium legal practice.
Events after the reporting period
There are no other events than those mentioned in the above and in note 5 that have occurred after
31 March 2026 and that are expected to have material impact on the financial position of the Group.
Forward-looking statements
This report contains forward-looking statements. Such statements are subject to risk and uncertainties
as various factors, many of which are beyond Scandinavian Tobacco Group’s control, may cause
actual developments and results to differ materially from the expectations set out in this report.
11
Executive Management
Board of Directors
12
CONSOLIDATED STATEMENT OF INCOME
1 JANUARY - 31 MARCH
DKK million
Q1 2026
Q1 2025
INCOME STATEMENT
Net sales
2
Cost of goods sold
2
-1,035.4
-1,107.0
Gross profit before special items
2
Other external costs
2
-232.0
-285.9
Staff costs
2
-302.4
-274.9
Other income
2
Earnings before interest, tax, depreciation, amortisation and special items
(EBITDA before special items)
2
Depreciation and impairment
-63.3
-63.0
Earnings before interest, tax, amortisation and special items (EBITA before
special items)
Amortisation and impairment
-64.0
-48.3
Earnings before interest, tax and special items (EBIT before special items)
Special items, costs and impairment
3
-75.6
-69.8
Earnings before interest and tax (EBIT)
Share of profit of associated companies, net of tax
Financial income
Financial costs
-93.0
-89.0
Profit before tax
Income taxes
-12.9
-15.4
Net profit for the period
Earnings per share
Basic earnings per share (DKK)
Diluted earnings per share (DKK)
STATEMENT OF COMPREHENSIVE INCOME
Net profit for the period
OTHER COMPREHENSIVE INCOME
Items that will be recycled subsequently to the Consolidated Income Statement,
when specific conditions are met:
Foreign exchange adjustments on net investments in foreign operations
-200.7
Other comprehensive income for the period, net of tax
-200.7
Total comprehensive income for the period
-149.2
13
Net sales
In the first quarter of 2026, net sales were DKK 1,859 million (DKK 1,974 million). Adjusted for negative
exchange rate impacts (DKK 103 million), the organic growth in net sales was negative by 0.6%, driven
by negative organic growth in Europe Branded partly offset by a positive organic growth in North Amer-
ica Branded & Rest of World and North America Online & Retail.
Profit
Gross profit before special items for the first quarter of 2026 was DKK 824 million (DKK 867 million)
mainly driven by the lower net sales. Gross margin before special items increased to 44.3% (43.9%).
Operating expenses for the first quarter of 2026 decreased by 5% compared to the same quarter last
year and stood at DKK 534 million (DKK 561 million). The OPEX ratio increased slightly to 28.7%
(28.4%).
EBITDA before special items for the first quarter of 2026 was in line with the same quarter last year
and stood at DKK 320 million (DKK 317 million).
EBITDA margin before special items for the first quarter of 2026 was 17.2% (16.1%).
EBIT before special items for the first quarter of 2026 decreased by 6% compared to the same quarter
last year and stood at DKK 193 million (DKK 206 million). EBIT before special items increased organ-
ically by 0.9% compared with the first quarter last year. The EBIT margin before special was 10.4%
and was unchanged compared to same quarter last year.
During the quarter DKK 76 million (DKK 70 million) have been expensed as special items, mainly
relating to the ERP implementation project, OneProcess, and reorganisations.
Net profit for the first quarter of 2026 was DKK 43 million (DKK 52 million). Earnings Per Share (EPS)
were DKK 0.6 (DKK 0.7). Earnings Per Share adjusted for special items, fair value adjustments and
currency gains/losses, net of tax stood at DKK 1.1 (DKK 1.5).
14
CONSOLIDATED BALANCE SHEET
ASSETS
DKK million
31 March 2026
31 March 2025
31 December
2025
INTANGIBLE ASSETS
Goodwill
Trademarks
IT software
Other intangible assets
Intangible assets under development
Total intangible assets
Property, plant and equipment
Investments in associated companies
Deferred income tax assets
Total non-current assets
Inventories
Trade receivables
Other receivables
Corporate tax
Prepayments
Cash and cash equivalents
Assets classified as held for sale
Total current assets
Total assets
15
CONSOLIDATED BALANCE SHEET
EQUITY AND LIABILITIES
DKK million
31 March 2026
31 March 2025
31 December
2025
Share capital
Reserve for currency translation
Treasury shares
-35.0
-787.8
-35.0
Retained earnings
Total equity
Borrowings
Deferred income tax liabilities
Pension obligations
Other provisions
Lease liabilities
Other liabilities
Total non-current liabilities
Borrowings
Credit facilities
Trade payables
Corporate tax
Other provisions
Lease liabilities
Other liabilities
Total current liabilities
Total liabilities
Total equity and liabilities
Net interest-bearing debt
Net interest-bearing debt decreased by DKK 91 million to DKK 5,370 million versus the end of 2025.
The leverage ratio (net interest-bearing debt to LTM EBITDA before special items) was 3.0x and un-
changed compared to 31 December 2025.
Return on Invested Capital
The return on invested capital (ROIC) was 7.8% versus 7.9% by the end of 2025, explained mainly by
a DKK 19 million reduction in EBIT and driven by the operational performance. Invested capital was
fairly stable and stood at DKK 14.3 billion (DKK 14.5 billion end of 2025).
16
CONSOLIDATED CASH FLOW STATEMENT
1 JANUARY – 31 MARCH
DKK million
Q1 2026
Q1 2025
Net profit for the period
Depreciation, amortisation and impairment
Adjustments
Changes in working capital
-37.9
Special items, paid
-57.9
-66.7
Cash flow from operating activities before financial items
Financial income received
Financial costs paid
-55.1
-38.3
Cash flow from operating activities before tax
Tax payments
-42.7
-88.3
Cash flow from operating activities
Acquisitions
-4.3
Investment in intangible assets
-8.6
-4.6
Investment in property, plant and equipment
-19.1
-22.5
Sale of property, plant and equipment
Dividend from associated companies
Cash flow from investing activities
-25.5
Free cash flow
Repayment of lease liabilities
-19.1
-23.7
RCF and bank loan
-120.0
-270.0
Repayment bank loans
-0.2
-1.1
Cash flow from financing activities
-139.3
-294.8
Net cash flow for the period
-143.0
Cash and cash equivalents, net at 1 January
-6.3
Exchange gains/losses on cash and cash equivalents
-3.6
Net cash flow for the period
-143.0
Cash and cash equivalents, net at 31 March
Cash flow
Cash flow from operations before changes in working capital in the first quarter of 2026 was DKK 185
million (DKK 136 million). The development was mainly driven by the operational performance, lower
tax payments partly offset by higher financial costs in the first quarter of 2026 compared to the same
quarter last year. Changes in working capital in the first quarter of 2026 had a negative impact on the
cash flow of DKK 38 million (positive DKK 41 million).
Cash flow from investing activities in the first quarter of 2026 amounted to DKK 12 million (DKK -26
million), positively impacted by income from sale of property, plant and equipment.
17
Cash flow from financing activities in the first quarter of 2026 amounted to DKK -139 million (DKK -
295 million). The first quarter of 2026 was mainly impacted by repayment on the revolving credit facility.
Free cash flow before acquisitions in the first quarter of 2026 was positive by DKK 158 million (DKK
156 million). The cash conversion ratio was 109% (139%).
STATEMENT OF CHANGES IN GROUP EQUITY
1 JANUARY - 31 MARCH 2026
DKK million
Share
capital
Reserve
for
currency
transla-
tion
Treasury
shares
Retained
earnings
Total
Equity at 1 January 2026
-35.0
Comprehensive income for the period
Net profit for the period
Other comprehensive income
Foreign exchange adjustments on net investments in
foreign operations
Total other comprehensive income
Total comprehensive income for the period
Transactions with shareholders
Share-based payments
Total transactions with shareholders
Equity at 31 March 2026
-35.0
Equity
Total shareholders’ equity as at 31 March 2026 amounted to DKK 8,712 million (DKK 8,572 million on
31 December 2025). The equity was positively impacted by profit for the period and foreign exchange
adjustments on net investments in foreign operations. As of 31 March 2026, the equity ratio was 53.2%
(52.6% on 31 December 2025).
18
STATEMENT OF CHANGES IN GROUP EQUITY
(Continued)
1 JANUARY – 31 MARCH 2025
DKK million
Share
capital
Reserve
for
currency
translation
Treasury
shares
Retained
earnings
Total
Equity at 1 January 2025
-787.8
Comprehensive income for the period
Net profit for the period
Other comprehensive income
Foreign exchange adjustments on net invest-
ments in foreign operations
-200.7
-200.7
Total other comprehensive income
-200.7
-200.7
Total comprehensive income for the period
-200.7
Transactions with shareholders
Share-based payments
Total transactions with shareholders
Equity at 31 March 2025
-787.8
19
NOTES
NOTE 1
BASIS OF PREPARATION
The interim consolidated financial statements for the first quarter of 2026, ending 31 March 2026, has
been prepared in accordance with IAS 34, Interim Financial Reporting, and additional Danish disclo-
sure requirements for listed companies.
The interim consolidated financial statements do not include all the information and disclosures as
required for the annual financial statements and should therefore be read in conjunction with the infor-
mation and disclosures given in the Group’s Annual Report for 2025.
The accounting policies adopted in the preparation of the interim consolidated financial statements are
consistent with those followed in preparation of Group’s Annual Report for 2025, except for the adop-
tion of new and amended accounting standards effective as of 1 January 2026.
Based on an assessment of new or amended and revised accounting standards and interpretations
issued by the International Accounting Standards Board (IASB) and endorsed by the European Union
effective on or after 1 January 2026, it has been assessed that the application of these new accounting
standards has not had a material impact on the consolidated financial statements.
The Group has not adopted any new standards, interpretations or amendments that have been issued
but are not effective yet.
Significant accounting estimates
The estimates made by STG in the determination of the carrying amounts of assets and liabilities are
based on assumptions that are subject to future events. For a description of risks and accounting es-
timates, refer to the Annual Report for 2025.
20
NOTE 2
SEGMENT INFORMATION AND NET SALES
3M 2026
North
America
Online &
Retail
North
America
Branded
& RoW
Europe
Branded
Group
costs / not
allocated
Total
DKK million
Net sales
574.5
654.8
629.9
-
1,859.2
Cost of goods sold
-370.1
-358.2
-307.1
-
-1,035.4
Gross profit before special items
204.4
296.6
322.8
-
823.8
Staff and other external costs
-159.9
-125.9
-207.5
-41.1
-534.4
Other income
-
30.6
-
-
30.6
EBITDA before special items
44.5
201.3
115.3
-41.1
320.0
Depreciation and impairment
-63.3
-63.3
Amortisation and impairment
-64.0
-64.0
EBIT before special items
-168.4
192.7
Special items, costs and impairment
-75.6
-75.6
EBIT
-244.0
117.1
Share of profit of associated
companies, net of tax
4.9
4.9
Financial income
27.3
27.3
Financial costs
-93.0
-93.0
Profit before tax
-304.8
56.3
3M 2025
North
America
Online &
Retail
North
America
Branded
& RoW
Europe
Branded
Group
costs / not
allocated
Total
DKK million
Net sales
618.7
667.7
687.3
-
1,973.7
Cost of goods sold
-366.5
-337.4
-403.1
-
-1,107.0
Gross profit before special items
252.2
330.3
284.2
-
866.7
Staff and other external costs
-178.7
-131.8
-218.2
-32.1
-560.8
Other income
-
11.1
-
-
11.1
EBITDA before special items
73.5
209.6
66.0
-32.1
317.0
Depreciation and impairment
-63.0
-63.0
Amortisation and impairment
-48.3
-48.3
EBIT before special items
-143.4
205.7
Special items, costs and impairment
-69.8
-69.8
EBIT
-213.2
135.9
Share of profit of associated
companies, net of tax
3.9
3.9
Financial income
16.1
16.1
Financial costs
-89.0
-89.0
Profit before tax
-282.2
66.9
21
NOTE 2
SEGMENT INFORMATION AND NET SALES (continued)
3M 2026
DKK million
Category split, net sales
North
Amer-
ica
Online
& Re-
tail
North
America
Branded
& RoW
Europe
Branded
Total
Handmade cigars
429.1
210.2
20.9
660.2
Machine-rolled cigars & smoking tobacco *
79.5
334.0
542.7
956.2
Next Generation Products
-
13.0
51.0
64.0
Other **
65.9
97.6
15.3
178.8
Total net sales
574.5
654.8
629.9
1,859.2
* License income and other sales included
-
4.1
-
4.1
** License income and other sales included
7.2
12.2
2.2
21.5
Total License income and other sales included
7.2
16.3
2.2
25.6
3M 2025
DKK million
Category split, net sales
North
Amer-
ica
Online
& Re-
tail
North
America
Branded
& RoW
Europe
Branded
Total
Handmade cigars
444.0
206.5
22.1
672.6
Machine-rolled cigars & smoking tobacco *
88.7
357.6
564.9
1,011.2
Next Generation Products
-
6.6
73.1
79.7
Other **
86.0
97.0
27.2
210.2
Total net sales
618.7
667.7
687.3
1,973.7
* License income and other sales included
-
3.5
-
3.5
** License income and other sales included
8.6
5.7
1.7
16.5
Total License income and other sales included
8.6
9.2
1.7
19.5
DKK million
3M 2026
3M 2025
Geographical split, net sales
Americas
969.7
1,023.0
Europe
763.1
853.6
Rest of World
126.4
97.1
Total net sales
1,859.2
1,973.7
22
NOTE 3
SPECIAL ITEMS
DKK million
3M 2026
3M 2025
Integration and transaction costs (Mac Baren)
5.0
26.2
One Commercial Organisation
-
4.3
OneProcess
31.3
34.1
Focus2030 reorganisation
33.3
-
Solution Delivery Organisation
6.0
5.2
Total special items
75.6
69.8
NOTE 4
CONTINGENT LIABILITIES
Scandinavian Tobacco Group has disposed tobacco waste without respecting the correct formalities.
This is currently being audited by the Belgian customs and excise authorities and there is a risk that
they will require the Group to pay excise duties (estimated at EUR 7-9 million) as if the waste had been
sold on the market plus penalties and interest. The Group does not consider it is liable for excise taxes.
However, the outcome of the case is uncertain based on Belgium legal practice and therefore no
provision has been recognised.
Note 5
CONTINGENT ASSET AND SUBSEQUENT EVENT
In February 2026, the U.S. Supreme Court ruled that certain tariffs imposed under executive authority
were unlawful, establishing that previously paid tariffs could, in principle, be subject to refund. Subse-
quent, to the reporting date, U.S. Customs and Border Protection announced and opened a formal
refund process, prompting management to initiate an assessment of the scope and basis for a potential
refund. This assessment is ongoing, and as there can be no guarantee that a refund, if received, will
equal the full amount of tariffs paid, Management has decided due to the high uncertainty not to record
a receivable related to the potential recovery of tariffs paid as of March 31, 2026.