XCSE:STG ESEF Annual Report
SCANDINAVIAN TOBACCO GROUP A/S (XCSE:STG)
ESEF Annual Report
2025-08-28
For: 2025-06-30
View Original
Added on
September 22, 2026
Company Announcement
No. 14/2025
Copenhagen, 27 August 2025
Interim report, 1 January – 30 June 2025
Results and Reaffirms Expectations for Full-Year.
For the second quarter 2025, reported net sales were DKK 2.4 billion with an organic net sales growth
of -4%. EBITDA before special items was DKK 499 million with an EBITDA margin of 21.1% compared
with 24.5% last year. Free cash flow before acquisitions was DKK 119 million and the adjusted EPS
were DKK 3.3. The results support the expectations for the full year which are reaffirmed.
The reported net sales were enhanced by the addition of the Mac Baren business, whereas exchange
rate developments impacted growth negatively. The development in organic net sales was flat exclud-
ing the discontinuation of distribution of ZYN in the US (-3%) and lower sales from contract manufac-
turing and of accessories in the profitable Australian market. Organic growth recovered in the product
categories Handmade Cigars and Machine-Rolled Cigars & Smoking Tobacco and our nicotine pouch
brand XQS continued to deliver double digit growth.
The EBITDA margin before special items recovered in the second quarter compared with the first
quarter of the year leaving the margin for the first six months of the year at 18.8% (21.2%). The decline
in the margin compared with 2024 is driven by a combination of product and market mix, investments
in re-gaining market shares in machine-rolled cigars in key European markets, discontinuation of dis-
tribution of ZYN in the US and generally challenging market conditions. The discontinuation of ZYN
will not impact the year-on-year comparisons from the third quarter and onwards. Free cash flow before
acquisitions for the first six months improved to DKK 275 million.
Second Quarter 2025
• Reported net sales decreased by 0.2% to DKK 2.4 billion (DKK 2.4 billion)
• Organic net sales growth was negative by 4.1% (4.8%)
• EBITDA margin before special items was 21.1% (24.5%)
• Adjusted EPS were DKK 3.3 (DKK 4.1)
• Free cash flow before acquisitions was DKK 119 million (DKK 177 million).
• Return on Invested Capital (ROIC) was 8.3% (10.5%).
First six months 2025
• Reported net sales increased by 0.5% to DKK 4.3 billion (DKK 4.3 billion)
• Organic net sales growth was negative by 6.3% (1.5%)
• EBITDA margin before special items was 18.8% (21.2%)
• Adjusted EPS were DKK 4.7 (DKK 5.8)
• Free cash flow before acquisitions was DKK 275 million (DKK 52 million)
2
CEO Niels Frederiksen: “Despite the challenging market environment driven by tariffs and geopolitical
unrest, I am pleased that we have remained focused on delivering on our strategic priorities. The Mac
Baren integration is on track to create substantial value, our market positions in machine-rolled cigars
have stabilized, and the Growth Enablers continue to enhance our net sales performance. Although
the EBITDA margin decreased compared to last year, the results for the second quarter support our
expectations for the full year, including delivery of DKK 800-1,000 million in free cash flow before
acquisitions. We are in the process of updating our strategy for the next five years to 2030 and I look
forward to sharing more details with you later in the year”.
Financial expectations for full year 2025
The financial expectations for full year 2025 are maintained. The biggest uncertainties to the expecta-
tions are the market developments, including consumer behaviour and pricing for handmade cigars in
the US as well as the development of the USD, which in particular can impact reported net sales.
Guidance and assumptions are based on no impact from potential new acquisitions and at exchange rates as of the reporting date. A 10% change
in the USD/DKK exchange rate would impact group net sales by approximately 5 percentage points with EBITDA margins being only marginally
impacted.
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 28 August 2025 at 10.00 CEST. Dial-in information and an accom-
panying presentation will be available at investor.st-group.com/investor around 09:00 CEST.
Reported net sales DKK 9.1-9.5 billion
EBITDA margin before special items 18-22%
Free cash flow before acquisitions DKK 0.8-1.0 billion
Adjusted EPS DKK 10-13
3
Key Figures
DKK million
Q2 2025
Q2 2024
6M 2025
6M 2024
FY2024
INCOME STATEMENT
Net sales
2,361
2,366
4,335
4,314
9,202
Gross profit before special items
1,063
1,109
1,930
1,990
4,279
EBITDA before special items
499
580
816
915
2,079
Special items
-35
-53
-105
-83
-279
EBIT
354
429
490
637
1,380
Net financial items
1
-67
-53
-140
-107
-186
Profit before tax
295
385
362
544
1,219
Income taxes
-68
-88
-83
-122
-280
Net profit
227
297
279
422
940
BALANCE SHEET
Total assets
16,245
16,428
17,104
Equity
8,135
8,881
9,217
Net interest-bearing debt (NIBD)
5,698
5,364
5,423
Investment in property, plant and equipment
38
50
60
100
216
Total capital expenditures
40
74
67
132
264
CASH FLOW STATEMENT
Cash flow from operating activities
150
246
327
175
1,179
Cash flow from investing activities
-31
-118
-56
-210
-824
Free cash flow
119
129
271
-34
355
Free cash flow before acquisitions
119
177
275
52
931
KEY RATIOS
2
Net sales growth
-0.2%
6.3%
0.5%
3.0%
5.4%
Gross margin before special items
45.0%
46.9%
44.5%
46.1%
46.5%
EBITDA margin before special items
21.1%
24.5%
18.8%
21.2%
22.6%
Effective tax percentage
23.0%
22.9%
23.0%
22.5%
22.9%
Equity ratio
50.1%
54.1%
53.9%
Cash conversion
61.2%
96.5%
89.8%
70.4%
100.8%
Organic net sales growth
-4.1%
4.8%
-6.3%
1.5%
0.4%
NIBD / EBITDA before special items
2.9
2.6
2.6
ROIC
8.3%
10.5%
9.4%
ROIC ex. Goodwill
13.0%
16.6%
14.7%
Adjusted earnings per share (DKK)
3.3
4.1
4.7
5.8
13.7
Basic earnings per share (DKK)
2.9
3.6
3.5
5.0
11.5
Diluted earnings per share (DKK)
2.9
3.5
3.5
5.0
11.4
Number of shares issued ('000)
80,000
86,000
86,000
Number of treasury shares ('000)
1,266
4,211
7,266
Number of outstanding shares ('000)
3
78,855
84,354
82,162
Share price at balance date (DKK)
84.00
98.30
95.30
Dividend per share (DKK)
8.50
Pay-out ratio
77.8%
1. Excl. share of profit of associated companies.
2. See definition/explanation of financial ratios in note 5.8 in the Annual Report 2024.
3. Average number of shares outstanding, including dilutive effect of PSUs.
4
Second Quarter 2025 - Financial performance
Divisional split Q2 2025
Net sales and organic growth EBITDA before special items and margin
Sales
For the Group, the second quarter reported net sales at DKK 2.4 billion was in line with last year
impacted positively by the acquisition of Mac Baren by 7% and exchange rates developments by -3%.
Organic net sales growth for the second quarter was -4%. Excluding the impact from the discontinua-
tion of the distribution of ZYN in the US, organic net sales growth was -1%.
By the three reporting divisions the organic net sales performance in the second quarter was -2%
in Europe Branded (“EUB”), -1% in North America Branded & Rest of World (“NABROW”), and -10%
in North America Online & Retail (“NAOR”). The latter driven by the discontinuation of ZYN in the US.
For the first six months, organic net sales growth in the reporting divisions were -3% in EUB, -7% in
NABROW and –10% in NAOR (-1% excluding ZYN).
By product categories the organic net sales development in the second quarter was 1% in Handmade
Cigars (“HMC”), 3% in Machine-Rolled Cigars & Smoking Tobacco (“MRCST”) and -43% in Next Gen-
eration Products (“NGP”). Our own nicotine pouch brand, XQS delivered 17% organic net sales
growth.
For the first six months, organic net sales growth in the product categories were -4% in HMC, 0% in
MRCST and -43% in NGP with the XQS brand growing 25%.
Table 1: Net sales
Table 2: Free Cash Flow before acquisitions
Q2
Q2
Change
DKK million
2025
2024
in %
Reported net sales
2,361
2,366
-0.2%
Acquisitions
166
Currency development
66
Organic net sales
2,427
2,532
-4.1%
Q2
Q2
Change
DKK million
2025
2024
in DKK
EBITDA
499
580
-81
Working Cap. changes
-238
-26
-212
Investments a.o.
-142
-377
+235
FCF bef. acq.
119
177
-58
Profit and Cash Flow
For the second quarter 2025, EBITDA before special items decreased to DKK 499 million with an
EBITDA margin before special items of 21.1% compared with 24.5% in the same quarter of 2024. The
33%
36%
31%%
NA Branded &
RoW
Europe Branded
NA Online &
Retail
44%
38%
18%
DKK 2,361m
-4.1%
DKK 499m
21.1%
5
OPEX ratio increased to 24.2% compared with 23.0% in 2024 as result of cost inflation and lower
organic net sales.
Special items of DKK 35 million were expensed in the second quarter of 2025, mainly relating to the
ERP implementation project, OneProcess, and reorganisations. Net profit decreased by 24% to DKK
227 million while Adjusted Earnings Per Share decreased by 20% to DKK 3.3.
The Group’s free cash flow before acquisitions was DKK 119 million (DKK 177 million) in the second
quarter 2025. The development primarily relates to a negative impact from changes in working capital
being only partly offset by a positive impact from lower tax payments in the quarter compared with the
same quarter last year. Changes in working capital impacted the quarter negatively by DKK 238 million
compared with a negative impact of DKK 26 million in the second quarter of 2024. The development
in working capital is mainly driven by a temporary increased level of inventories and trade receivables.
Leverage and Return on Invested Capital
By the end of the second quarter, the Group´s leverage ratio was 2.9 times compared with 2.6 times
by the end of 2024. The return on invested capital (ROIC) was 8.3% versus 9.4% by the end of 2024.
The development was primarily driven by the operational performance. The average invested capital
was DKK 14.8 billion compared with DKK 14.7 billion by the end of 2024.
Strategy and Other Key Updates
Growth Enablers
In our strategy Rolling Towards 2025, we identified three revenue streams to support our ambition to
become a larger company and to increase profits. These Growth Enablers comprise international sales
of handmade cigars (outside of the US), retail stores in the US and Next Generation Products with a
focus on nicotine pouches. Each will be discussed in more detail in the section Product Categories.
Nicotine pouches and the retail stores in the US continue to perform well and delivered meaningful net
sales growth, whereas international sales of handmade cigars in the second quarter were negatively
affected by lower sales to the Asian market.
In the second quarter as well as for the first six months of the year, the Growth Enablers accounted
for 10% of Group net sales compared with about 9% for the full year of 2024*.
* Excluding net sales from the online distribution of ZYN in the US, which was discontinued as of the third quarter last year.
Launch of New Strategy in November 2025
The five-year strategy Rolling Towards 2025 is coming to an end and as previously communicated
Scandinavian Tobacco Group will launch an updated strategy later in the year. We expect to launch
the updated strategy 20 November 2025, where Group management will host a virtual Capital Market
Event. More details will be announced closer to the event.
Potential claim by Belgian excise 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 (estimated at EUR 7-9 million) as if the waste had been
sold on the market plus penalties and interest.
6
The Group´s internal investigations as to the size and cause of the issue is still ongoing.
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.
Expectations for full year 2025
The financial performance during the second quarter of the year and in the beginning of the third
quarter support the expectations for the full-year 2025, which were communicated 20 May.
The underlying business trends remain largely unchanged with consumption of handmade cigars con-
tinuing to contract and volumes of machine-rolled cigars in Europe decreasing by low single-digit per-
centages, albeit with variations from market to market. The uncertainty related to US consumer senti-
ment, down trading and retailer decisions on inventory across our product categories remain high.
The U.S. market accounts for approximately 45% of the Group’s net sales. Since the release of the
2025 financial outlook on 20 May, the U.S. dollar has depreciated by almost 4% against the Danish
krone. The Group maintain the expectation to reported net sales for 2025 to be in the range of DKK
9.1-9.5 billion. Though, based on the current level of the USD, more likely in the lower end of the range.
The opening of two retail super stores in the US, stabilisation of market shares in machine-rolled ci-
gars, continued growth of XQS and pricing will support net sales performance in the second half the
year.
The range for the full-year EBITDA margin is maintained in the range of 18-22%. A continued recovery
of margins in machine-rolled cigars, integration benefits from the Mac Baren acquisition, pricing and
cost discipline are expected to enhance the EBITDA margin during the second half of the year com-
pared with the first half.
Free cash flow is projected at DKK 0.8–1.0 billion. The free cash flow for the full year is expected to
be impacted by capex investments of up to DKK 300 million including factory consolidations, OnePro-
cess investments and the opening of two new retail super stores in the US. Special cash items paid is
expected at about DKK 200 million, primarily relating to the Mac Baren integration and roll-out of our
SAP 4/Hana ERP solution. The cash flow generation will be stronger in the second half of the year
compared with the first half primarily as result of the operational performance. Based on the expected
normalisation of inventories and trade receivables, we are well on track to deliver within the projected
range.
Based on these expectations, the leverage ratio is expected to decrease slightly by year-end compared
to the end of the first half of the year.
Given these considerations our expectations for 2025 are:
Guidance and assumptions are based on no impact from potential new acquisitions and at current exchange rates. A 10% change in the USD/DKK
exchange rate would impact group net sales by approximately 5 percentage points with EBITDA margins being only marginally impacted.
Reported net sales DKK 9.1-9.5 billion
EBITDA margin before special items 18-22%
Free cash flow before acquisitions DKK 0.8-1.0 billion
Adjusted EPS DKK 10-13
7
Events after the reporting period
There are no other events than those mentioned in the above that have occurred after 30 June 2025
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.
8
Product categories
Net sales distribution and growth by product category
Q2 2025
YTD / 6M 2025
% of
Group
Organic
Growth
Reported
Growth
% of
Group
Organic
Growth
Reported
Growth
Handmade Cigars
36%
1%
-4%
35%
-4%
-5%
Machine-Rolled Cigars & Smoking Tobacco
51%
3%
11%
51%
0%
11%
Next Generation Products
4%
-43%
-25%
4%
-43%
-23%
Other
9%
-23%
-20%
10%
-19%
-13%
Total
100%
-4%
-0%
100%
-6%
1%
Handmade Cigars
The product category Handmade Cigars accounted for 36% of group net sales in the quarter. Reported
net sales decreased by 4% compared with the same quarter last year driven by the decrease in the
USD. Organic growth in net sales was 1%.
Sales of handmade cigars to wholesalers and distributors in the US recovered compared with previous
quarters, whereas sales to international markets (excluding the US) continued to decrease. Online
sales of handmade cigars were slightly down compared with the second of last year, while sales
through our retail superstores continue to increase driven by new store openings.
In our business-to-business operation in NABROW, a low single-digit volume decline rate was more
than offset by strong pricing as response to changes in tariffs on imported goods from predominantly
the Caribbean countries. Pricing in our business-to-consumer operation (NAOR), has been more tac-
tical.
International sales of handmade cigars, accounting for less than 3% of Group net sales, delivered
negative growth in reported net sales during the quarter due to a lower sale to the Asian market. We
estimate that our brands have a 6% volume share of the market for handmade cigars outside North
America making Scandinavian Tobacco Group the third largest company in this segment.
Machine-Rolled Cigars and Smoking Tobacco
The product category Machine-Rolled Cigars & Smoking Tobacco accounted for 51% of group net
sales in the quarter. Reported net sales increased by 11% compared with the same quarter last year
primarily impacted by the acquisition of Mac Baren. Organic growth in net sales was 3%.
Smoking tobacco delivered 42% growth in reported net sales and machine-rolled cigars delivered neg-
ative growth in reported net sales of 3%. Excluding the impact from acquisitions and exchange rates,
smoking tobacco delivered 10% organic net sales growth in the quarter and machine-rolled cigars -
2%.
Preliminary total market data for machine-rolled cigars in our key European markets indicate a recov-
ery in volumes with an increase of 1.5% in the second quarter compared to the second quarter last
year and a decline of 0.7% for the first half of the year compared with a decline rate of 3.5% for the full
year of 2024. The preliminary data also indicate that our volume market share recovered to 27.7%
compared with the temporary drop in the first quarter. For the first six months the market share is
estimated at 27.3% compared with 27.8% for the first six months of 2024.
9
Next Generation Products
The product category Next Generation Products accounted for 4% of group net sales in the quarter.
Reported net sales for NGPs decreased by 25% compared with the same quarter last year with organic
net sales decreasing by 43%. The discontinuation of the distribution of ZYN in our US online business
impacted organic net sales growth by -47% and the streamlining of the Mac Baren nicotine pouch
brands, Ace and Gritt to fewer markets did also impact growth negatively. XQS delivered double-digit
organic net sales growth both in Sweden and in the UK and the brand continues to take market share
in Sweden now exceeding 12%.
Other
In the second quarter 2025, organic net sales in the category Other, decreased by 23%. The decrease
primarily relates to lower contract manufacturing and lower sales of accessories in Australia as ex-
pected.
10
Financial performance by division
Net sales distribution and growth by division
Q2 2025
YTD / 6M 2025
% of
Group
Organic
Growth
Reported
Growth
% of
Group
Organic
Growth
Reported
Growth
Europe Branded
36%
-2%
10%
36%
-3%
11%
North America Branded & Rest of World
33%
-1%
4%
33%
-7%
1%
North America Online & Retail
31%
-10%
-13%
31%
-10%
-10%
Total
100%
-4%
-0%
100%
-6%
1%
Europe Branded
During the second quarter reported net sales increased by 10% compared to the same quarter last
year with acquisitions impacting reported growth by 11% and exchange rates by 1%. Organic net sales
growth was -2% though positive in our nicotine pouch business, whereas the organic growth in both
Handmade Cigars and in Machine-Rolled Cigars & Smoking Tobacco was negative with both product
categories improving compared with the first quarter of the year.
Second Quarter Development, 2021-2025
For the second quarter EBITDA before special items increased by 7% with an EBITDA margin before
special items of 24.3% compared with 24.9% in the same quarter last year. The decrease in the
EBITDA margin is primarily a result of mix changes driven by the expansion of nicotine pouches and
to a lesser extent cost inflation.
For the first six months of 2025 reported net sales increased to DKK 1.5 billion with an organic growth
of -3%. Reported gross profit before special items increased by 6% to DKK 713 million and the gross
margin was 46.4% (48.4%). Reported EBITDA before special items decreased by 1% to DKK 273
million with an EBITDA margin of 17.7% (19.9%).
North America Branded & Rest of World
During the second quarter reported net sales increased by 4% compared with the same quarter last
year with acquisitions impacting reported growth by 9% and exchange rates impacting by -4%. Organic
net sales growth was -1%. Handmade Cigars and Machine Rolled-Cigars & Smoking Tobacco deliv-
ered mid-single digit organic net sales growth in the second quarter driven by pricing reversing the
negative development in the beginning of the year.
Volumes of handmade cigars was negative by almost five percent being more off set by strong pricing.
Sales to international markets declined compared with 2024.
5%
10%
15%
20%
25%
30%
500
600
700
800
900
Q2 2021 Q2 2022 Q2 2023 Q2 2024 Q2 2025
Net sales and EBITDA margin b.s.i.
Net Sales (DKK million) EBITDA margin
11
Second Quarter Development, 2021-2025
For the second quarter EBITDA before special items decreased by 14% with an EBITDA margin before
special items of 30.2% compared with 36.6% in the same quarter last year. The development in the
profitability was primarily result of mix changes. The mix changes include lower sales of accessories
in Australia, lower fine-cut sales in Norway and an increase in net sales of handmade cigars to whole-
salers and distributors.
For the first six months of 2025 reported net sales increased to DKK 1.4 billion with an organic growth
of -7%. Gross profit before special items decreased by 6% to DKK 691 million and the gross margin
was 47.7% (51.0%). EBITDA before special items decreased by 8% to DKK 445 million with an
EBITDA margin of 30.7% (33.9%).
North America Online & Retail
During the second quarter reported net sales decreased by 13% compared to the same quarter last
year with acquisitions impacting reported growth by 1% and exchange rates by -5%. Organic net sales
growth was -10% impacted by about 10% from discontinuation of the distribution of ZYN in the US
online business. The online business, excluding the discontinued distribution, delivered stable net
sales in the quarter, while the retail stores delivered double-digit organic growth.
In the online business the decline in the twelve months active consumer file continued primarily re-
flecting a decrease in new customer acquisition. The retention rate amongst existing customers con-
tinued to improve.
The double-digit growth in the retail business was driven by the opening of new super stores despite
a decrease in same store sales.
Second Quarter Development, 2021-2025
For the second quarter EBITDA before special items decreased by 37% with an EBITDA margin before
special items of 13.1% compared with 18.1% in the same quarter last year. The decreasing margin is
20%
25%
30%
35%
40%
45%
500
600
700
800
900
Q2 2021 Q2 2022 Q2 2023 Q2 2024 Q2 2025
Net sales and EBITDA margin b.s.i.
Net Sales (DKK million) EBITDA margin
5%
10%
15%
20%
25%
400
500
600
700
800
Q2 2021 Q2 2022 Q2 2023 Q2 2024 Q2 2025
Net sales and EBITDA margin b.s.i.
Net Sales (DKK million) EBITDA margin
12
primarily driven by the discontinuation of the ZYN distribution and higher promotional activities more
than offsetting the pricing impact.
For the first six months of 2025 reported net sales decreased to DKK 1.3 billion with an organic growth
of -10%. Gross profit before special items decreased by 10% to DKK 526 million and the gross margin
was 39.0% (39.3%). EBITDA before special items decreased by 27% to DKK 170 million with an
EBITDA margin of 12.6% (15.7%).
13
Quarterly Financial Data
2025
DKK million Q2 Q1 Q4 Q3 Q2 6M 6M FY
Reported data
Net sales 2,361 1,974 2,458 2,431 2,366 4,335 4,314 9,202
Gross profit before special items 1,063 867 1,162 1,126 1,109 1,930 1,990 4,279
EBITDA before special items 499 317 596 568 580 816 915 2,079
Special items -35 -70 -148 -49 -53 -105 -83 -279
EBIT 354 136 342 401 429 490 637 1,380
Net financial items -67 -73 -54 -26 -53 -140 -107 -186
Profit before tax 295 67 292 383 385 362 544 1,219
Income taxes -68 -15 -71 -86 -88 -83 -122 -280
Net profit 227 52 221 297 297 279 422 940
Other financial key data
Organic net sales growth -4.1% -8.8% -1.0% -0.1% 4.8% -6.3% 1.5% 0.4%
Gross margin before special items 45.0% 43.9% 47.3% 46.3% 46.9% 44.5% 46.1% 46.5%
EBITDA margin before special items 21.1% 16.1% 24.3% 23.4% 24.5% 18.8% 21.2% 22.6%
Free cash flow before acquisitions 119 156 604 275 177 275 52 931
North America Online & Retail
Net sales 730 619 740 743 840 1,349 1,491 2,973
Gross profit before special items 274 252 286 292 331 526 586 1,164
EBITDA before special items 96 74 99 109 152 170 233 441
Net sales growth -13.1% -4.9% 0.2% -0.2% 13.6% -9.5% 11.1% 5.3%
Organic net sales growth -9.8% -9.6% -2.4% -0.9% 12.1% -9.7% 10.8% 4.2%
Gross margin before special items 37.5% 40.8% 38.6% 39.3% 39.4% 39.0% 39.3% 39.1%
EBITDA margin before special items 13.1% 11.9% 13.4% 14.6% 18.1% 12.6% 15.7% 14.8%
North America Branded & RoW
Net sales 780 668 870 837 751 1,448 1,432 3,139
Gross profit before special items 360 330 445 418 391 691 731 1,595
EBITDA before special items 235 210 342 302 275 445 486 1,130
Net sales growth 3.9% -2.0% 17.1% 3.5% -2.9% 1.1% -4.1% 3.1%
Organic net sales growth -0.5% -13.0% 3.5% -4.8% -3.5% -6.5% -4.8% -2.6%
Gross margin before special items 46.2% 49.5% 51.2% 50.0% 52.0% 47.7% 51.0% 50.8%
EBITDA margin before special items 30.2% 31.4% 39.3% 36.1% 36.6% 30.7% 33.9% 36.0%
Europe Branded
Net sales 851 687 848 850 775 1,539 1,391 3,090
Gross profit before special items 429 284 431 416 388 713 673 1,520
EBITDA before special items 207 66 183 189 193 273 276 649
Net sales growth 9.9% 11.4% 6.9% 18.8% 8.8% 10.6% 2.8% 7.9%
Organic net sales growth -2.0% -3.7% -4.2% 5.8% 6.1% -2.8% -0.5% 0.1%
Gross margin before special items 50.4% 41.3% 50.8% 48.9% 50.0% 46.4% 48.4% 49.2%
EBITDA margin before special items 24.3% 9.6% 21.6% 22.3% 24.9% 17.7% 19.9% 21.0%
Group costs
EBITDA before special items -39 -32 -28 -33 -40 -71 -80 -141
2025
2024
2024
14
EXECUTIVE MANAGEMENT
BOARD OF DIRECTORS
15
CONSOLIDATED STATEMENT OF INCOME
1 JANUARY - 30 JUNE
DKK million
Note
Q2 2025
Q2 2024
6M 2025
6M 2024
INCOME STATEMENT
Net sales
2
Cost of goods sold
2
-1,298.0
-1,256.6
-2,405.0
-2,323.7
Gross profit before special items
2
Other external costs
2
-277.0
-288.7
-562.9
-584.4
Staff costs
2
-294.2
-255.8
-569.1
-510.1
Other income
Earnings before interest, tax, depreciation, amorti-
sation and special items (EBITDA before special
items)
2
Depreciation and impairment
-61.4
-54.1
-124.4
-107.2
Earnings before interest, tax, amortisation and spe-
cial items (EBITA before special items)
Amortisation and impairment
-49.0
-44.2
-97.3
-88.1
Earnings before interest, tax and special items
(EBIT before special items)
Special items, costs and impairment
3
-34.7
-52.8
-104.5
-82.6
Earnings before interest and tax (EBIT)
Share of profit of associated companies, net of tax
Financial income
Financial costs
-85.9
-68.6
-174.9
-137.8
Profit before tax
Income taxes
-67.8
-88.3
-83.2
-122.4
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
-495.9
-696.6
Other comprehensive income for the period, net of
tax
-495.9
-696.6
Total comprehensive income for the period
-268.9
-418.1
16
Net sales
In the second quarter of 2025, net sales were DKK 2,361 million (DKK 2,366 million). Adjusted for a
negative exchange rate impact of DKK 66 million and acquisitions of DKK 166 million, the organic
growth in net sales was negative by 4.1%, primarily driven by North America Online & Retail, but also
North America Branded & Rest of World and Europe Branded delivered negative organic net sales
growth.
Profit
Gross profit before special items for the second quarter of 2025 was DKK 1,063 million (DKK 1,109
million) mainly driven by negative mix and cost increases. Gross margin before special items de-
creased to 45.0% (46.9%).
Operating expenses for the second quarter of 2025 increased by 4.9% compared to the same quarter
last year and stood at DKK 571 million (DKK 545 million). The OPEX ratio increased to 24.2% (23.0%).
EBITDA before special items for the second quarter of 2025 was DKK 499 million (DKK 580 million).
The development is mainly explained by the lower gross profit and the increased OPEX ratio.
EBITDA margin before special items for the second quarter of 2025 was 21.1% (24.5%).
During the quarter DKK 35 million (DKK 53 million) have been expensed as special items, mainly
relating to the ERP implementation project, OneProcess, and reorganisations. For further details, refer
to note 3.
Net profit for the second quarter of 2025 was DKK 227 million (DKK 297 million). Earnings Per Share
(EPS) were DKK 2.9 (DKK 3.6). Earnings Per Share adjusted for special items, fair value adjustments
and currency gains/losses, net of tax stood at DKK 3.3 (DKK 4.1).
In the first six months of 2025, gross profit before special items was DKK 1,930 million (DKK 1,990
million) with a gross margin of 44.5% (46.1%). EBITDA before special items was DKK 816 million (DKK
915 million) with an EBITDA margin of 18.8% (21.2%). Special items of DKK 105 million were ex-
pensed (DKK 83 million), net profit was DKK 279 million (DKK 422 million) with an EPS adjusted for
special items, fair value adjustments and currency gains/losses, net of tax at DKK 4.7 (DKK 5.8).
Second Quarter Development, 2021-2025
10%
14%
18%
22%
26%
30%
1000
1300
1600
1900
2200
2500
Q2 2021 Q2 2022 Q2 2023 Q2 2024 Q2 2025
Net sales and EBITDA margin b.s.i.
Net Sales (DKK million) EBITDA margin
17
CONSOLIDATED BALANCE SHEET
ASSETS
DKK million
30 Jun 2025
30 Jun 2024
31 Dec 2024
INTANGIBLE ASSETS
Goodwill
Trademarks
IT software
Other intangible assets
Intangible assets under development
Total intangible assets
PROPERTY, PLANT AND EQUIPMENT
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
18
CONSOLIDATED BALANCE SHEET
EQUITY AND LIABILITIES
DKK million
30 Jun 2025
30 Jun 2024
31 Dec 2024
Share capital
Reserve for currency translation
Treasury shares
-36.4
-473.6
-787.8
Retained earnings
Total equity
Borrowings
Deferred income tax liabilities
Pension obligations
Other provisions
Lease liabilities
Other liabilities
Total non-current liabilities
Borrowings
Liabilities directly associated with assets classified
as held for sale
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 increased by DKK 275 million to DKK 5,698 million versus the end of 2024.
The leverage ratio (net interest-bearing debt to LTM EBITDA before special items) was 2.9x compared
to 2.6x at 31 December 2024. The development was driven by the decreased EBITDA as well as
payment of ordinary dividends during the quarter.
Return on Invested Capital
The return on invested capital (ROIC) was 8.3% versus 9.4% by the end of 2024, explained mainly
by a DKK 147 million reduction in EBIT (12 months rolling) and driven by the operational perfor-
mance. Invested capital was stable and stood at DKK 14.8 billion (DKK 14.7 billion end of 2024).
19
CONSOLIDATED CASH FLOW STATEMENT
1 JANUARY - 30 JUNE
DKK million
Q2 2025
Q2 2024
6M 2025
6M 2024
Net profit for the period
Depreciation, amortisation and impairment
Adjustments
Changes in working capital
-237.5
-25.8
-196.3
-278.0
Special items, paid
-65.1
-43.5
-131.8
-67.4
Cash flow from operating activities before financial
items
Financial income received
Financial costs paid
-42.8
-49.9
-81.1
-93.5
Cash flow from operating activities before tax
Tax payments
-34.4
-197.7
-122.7
-280.9
Cash flow from operating activities
Acquisitions
-48.6
-4.3
-85.9
Investment in intangible assets
-2.2
-23.9
-6.8
-31.5
Investment in property, plant and equipment
-37.9
-50.3
-60.4
-100.2
Sale of property, plant and equipment
Dividend from associated companies
Cash flow from investing activities
-30.5
-117.8
-56.0
-209.6
Free cash flow
-34.3
Repayment of lease liabilities
-17.9
-18.5
-41.6
-36.3
RCF and bank loan
Repayment bank loans
-0.8
-1.0
-1.9
-2.0
Dividend payment
-669.2
-709.8
-669.2
-709.8
Purchase of treasury shares
-275.9
-433.5
Cash flow from financing activities
-57.9
-40.5
-352.7
-57.3
Net cash flow for the period
-81.9
-91.6
Cash and cash equivalents, net at 1 April / 1 January
-79.7
Exchange gains/losses on cash and cash equivalents
-6.7
-10.3
Net cash flow for the period
-81.9
-91.6
Cash and cash equivalents, net at 30 June
20
Cash flow
Cash flow from operations before changes in working capital in the second quarter of 2025 was DKK
387 million (DKK 272 million). The development was mainly driven by lower tax payments in the sec-
ond quarter of 2025 compared to the same quarter last year. Changes in working capital in the second
quarter of 2025 had a negative impact on the cash flow of DKK 238 million (DKK -26 million) mainly
driven by an increased level of inventories and trade receivables.
Cash flow from investing activities in the second quarter of 2025 amounted to DKK -31 million (DKK -
118 million). The second quarter of 2025 was mainly impacted by investments in property, plant and
equipment, while the same quarter last year was also impacted by earn-out payments related to pre-
vious acquisitions.
Cash flow from financing activities in the second quarter of 2025 amounted to DKK -58 million (DKK -
41 million). The second quarter of 2025 was mainly impacted by payment of dividend to shareholders,
partly offset by secured additional short-term funding.
Free cash flow before acquisitions in the second quarter of 2025 was positive by DKK 119 million
(DKK 177 million). The cash conversion ratio was 61% (97%).
For the first six months of 2025 cash flow from operations before changes in working capital was
DKK 523 million (DKK 453 million). Working capital had a negative impact of DKK 196 million (DKK -
278 million) mainly coming from a higher level of inventory only partly offset by a higher level of pay-
ables.
Free cash flow before acquisitions for the first six months of 2025 was positive by DKK 275 million
(negative DKK 52 million) and the cash conversion ratio was 90% (70%).
STATEMENT OF CHANGES IN GROUP EQUITY
DKK million
Share
capital
Reserve for cur-
rency 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
investments in foreign operations
-696.6
-696.6
Total other comprehensive income
-696.6
-696.6
Total comprehensive income for the period
-696.6
-418.1
Transactions with shareholders
Capital reduction
-6.0
-745.4
Share-based payments
Dividend paid to shareholders
-731.0
-731.0
Dividend, treasury shares
Total transactions with shareholders
-6.0
-1,408.9
-663.5
Equity at 30 June 2025
-36.4
21
STATEMENT OF CHANGES IN GROUP EQUITY (continued)
Equity
Total shareholders’ equity amounted to DKK 8,135 million on 30 June 2025 (DKK 9,217 million on 31
December 2024). The equity was negatively impacted by foreign exchange adjustments on net invest-
ments in foreign operations and dividend payments to shareholders being only partly offset by the
positive impact from profit for the period. As of 30 June 2025, the equity ratio was 50.1% (53.9% on
31 December 2024).
DKK million
Share
capital
Reserve for cur-
rency transla-
tion
Treasury
shares
Retained
earnings
Total
Equity at 1 January 2024
-141.4
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
Capital reduction
-1.0
-117.8
Purchase of treasury shares
-451.0
-451.0
Share-based payments
Dividend paid to shareholders
-730.8
-730.8
Dividend, treasury shares
Total transactions with shareholders
-1.0
-332.2
-826.5
-1,159.7
Equity at 30 June 2024
-473.6
22
NOTES
NOTE 1
BASIS OF PREPARATION
The interim consolidated financial statements for the first six months of 2025, ending 30 June 2025,
has been prepared in accordance with IAS 34, Interim Financial Reporting, and additional Danish
disclosure 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 2024.
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 2024, except for the adop-
tion of new and amended accounting standards effective as of 1 January 2025.
One amendment to IAS 21, The Effects of Changes in Foreign Exchange Rates relating to lack of
exchangeability applies for the first time in 2025. The amendment does not impact the interim consol-
idated financial statements for the Group.
The Group has not early adopted any new standards, interpretations or amendments that has 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 2024.
NOTE 2
SEGMENT INFORMATION AND NET SALES
6M 2025
North
America
Online &
Retail
North
America
Branded
& RoW
Europe
Branded
Group
costs / not
allocated
Total
DKK million
Net sales
1,349.0
1,447.5
1,538.6
-
4,335.1
Cost of goods sold
-822.7
-756.9
-825.4
-
-2,405.0
Gross profit before special items
526.3
690.6
713.2
-
1,930.1
Staff and other external costs
-356.8
-263.7
-440.2
-71.3
-1,132.0
Other income
-
18.0
-
-
18.0
EBITDA before special items
169.6
444.9
273.0
-71.3
816.1
Depreciation and impairment
-124.4
-124.4
Amortisation and impairment
-97.3
-97.3
EBIT before special items
-293.0
594.4
Special items, costs and impairment
-104.5
-104.5
EBIT
-397.5
489.9
Share of profit of associated
companies, net of tax
11.7
11.7
Financial income
35.0
35.0
Financial costs
-174.9
-174.9
Profit before tax
-525.7
361.7
23
NOTE 2
SEGMENT INFORMATION AND NET SALES (continued)
6M 2024
North
America
Online &
Retail
North
America
Branded
& RoW
Europe
Branded
Group
costs /
not allo-
cated
Total
DKK million
Net sales
1,490.6
1,432.0
1,391.5
-
4,314.1
Cost of goods sold
-904.2
-701.0
-718.5
-
-2,323.7
Gross profit before special items
586.4
731.0
673.0
-
1,990.4
Staff and other external costs
-353.0
-264.8
-396.6
-80.1
-1,094.5
Other income
-
19.4
-
19.4
EBITDA before special items
233.4
485.6
276.4
-80.1
915.3
Depreciation and impairment
-107.2
-107.2
Amortisation and impairment
-88.1
-88.1
EBIT before special items
-275.4
720.0
Special items, costs and impairment
-82.6
-82.6
EBIT
-358.0
637.4
Share of profit of associated
companies, net of tax
13.4
13.4
Financial income
31.0
31.0
Financial costs
-137.8
-137.8
Profit before tax
-451.4
544.0
DKK million
6M 2025
6M 2024
Category split, net sales
Handmade cigars
1,526.0
1,602.7
Machine-rolled cigars & Smoking Tobacco
2,206.4
1,991.7
Next Generation Products
185.7
239.6
Other
417.0
480.1
Total net sales
4,335.1
4,314.1
License income and other sales of DKK 8.3 million (DKK 8.0 million) are included in the category 'Machine-rolled
cigars & Smoking Tobacco'. License income and other sales of DKK 30.9 million (DKK 30.1 million) are included
in the category 'Other'.
DKK million
6M 2025
6M 2024
Geographical split, net sales
Americas
2.247.8
2,426.7
Europe
1,842.8
1,682.8
Rest of World
244.5
204.6
Total net sales
4.335.1
4.314.1
24
NOTE 3
SPECIAL ITEMS
DKK million
6M 2025
6M 2024
Integration and transaction costs (Mac Baren)
21.9
6.3
One Commercial Organisation
4.3
24.0
Solution Delivery Organisation
12.9
-
OneProcess
65.4
52.3
Total special items
104.5
82.6
NOTE 4
BUSINESS COMBINATIONS
With effect from 1 July 2024, Scandinavian Tobacco Group A/S acquired all the shares of Mac Baren
Tobacco Company A/S (“Mac Baren”) from Halberg A/S. The total consideration of DKK 491 million
was paid in cash.
Mac Baren
Mac Baren was a family-owned business founded in 1826 and is a leading global smoking tobacco
company, which includes pipe tobacco brands such as Mac Baren, Amphora and Holger Danske as
well as fine-cut tobacco brands like Amsterdamer, Choice and Opal. The company also produces and
sells nicotine pouches with the brands ACE and GRITT.
Mac Baren’s products are sold in 74 countries with the majority of net sales generated in the US,
Denmark and Germany. Other key markets include the UK, France, Spain and Italy. The company is
based in Svendborg, Denmark with production facilities in Denmark and in Richmond, Virginia in the
US. At the time of the acquisition, the company had approximately 200 fulltime employees.
Transaction costs
Total transaction costs related to the acquisition amount to DKK 7.0 million and was recognised in
“Special Items” in Q2 and Q3 2024.
25
NOTE 4
BUSINESS COMBINATIONS (continued)
DKK million
Trademarks
81.6
Other intangible assets
19.8
Property, plant and equipment
109.5
Right-of-use assets
29.9
Deferred income tax assets
41.4
Inventories
249.5
Trade receivables
161.3
Other Receivables
1.9
Corporate tax
1.0
Prepayments
3.1
Total assets
699.0
Deferred income tax liabilities
25.0
Trade payables
83.8
Corporate tax
2.9
Lease liabilities
29.9
Other liabilities
103.5
Total liabilities
245.1
Acquired net assets
453.9
Acquisition (cash flow)
453.9
Cash and cash equivalents in acquired business
37.1
Consideration transferred
491.0
NOTE 5
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.