XCSE:STG ESEF Annual Report
SCANDINAVIAN TOBACCO GROUP A/S (XCSE:STG)
ESEF Annual Report
2025-11-18
For: 2025-09-30
View Original
Added on
September 22, 2026
Company Announcement
No. 16/2025
Copenhagen, 11 November 2025
Interim report, 1 January – 30 September 2025
sults and Narrows Expectation Ranges for Full-Year.
For the third quarter 2025, reported net sales were DKK 2.4 billion with organic net sales in line with
last year. EBITDA before special items was DKK 519 million with an EBITDA margin of 22.0% com-
pared with 23.4% last year. Free cash flow before acquisitions was DKK 173 million and the adjusted
EPS were DKK 3.4. The results support the full-year expectations.
The reported net sales were negatively impacted by exchange rate developments. Organic growth
was positive in the product categories Handmade Cigars and Next Generation Products, whereas
Machine-Rolled Cigars & Smoking Tobacco delivered negative organic growth. The underlying busi-
ness trends remain largely unchanged, though the decline rate in handmade cigars show early signs
of stabilising.
The EBITDA margin before special items continued to recover in the third quarter compared with the
first two quarters of the year leaving the margin for the first nine months of the year at 19.9% (22.0%).
The decline in the margin compared with last year is driven by a combination of product and market
mix and investments in stabilising our market shares in machine-rolled cigars in key European mar-
kets. Free cash flow before acquisitions for the first nine months improved to DKK 448 million primarily
driven by changes in working capital and lower investments offsetting the decrease in EBITDA.
Third Quarter 2025
• Reported net sales decreased by 3.0% to DKK 2.4 billion (DKK 2.4 billion)
• Organic net sales growth was slightly up by 0.3% (-0.1%)
• EBITDA margin before special items was 22.0% (23.4%)
• Adjusted EPS were DKK 3.4 (DKK 4.1)
• Free cash flow before acquisitions was DKK 173 million (DKK 275 million).
• Return on Invested Capital (ROIC) was 8.3% (9.8%).
First nine months 2025
• Reported net sales decreased by 0.8% to DKK 6.7 billion (DKK 6.7 billion)
• Organic net sales growth was negative by 4.0% (0.9%)
• EBITDA margin before special items was 19.9% (22.0%)
• Adjusted EPS were DKK 8.2 (DKK 9.9)
• Free cash flow before acquisitions was DKK 448 million (DKK 327 million)
CEO Niels Frederiksen commented: “In the third quarter we saw early signs of stable sales but con-
tinued margin compression, driven by market and product mix as well as a more intense promotion
environment. I am pleased that we have grown both the handmade and the nicotine pouch business
2
in the quarter, but our market share performance in machine-rolled cigars has been negatively im-
pacted by instability created by the roll out of our global SAP solution. On 20 November we will launch
our next 5-year strategy and I look forward to sharing details on the Group’s ambitions and how we
intend to create meaningful value for our stakeholders for the years ahead”.
Financial expectations for full year 2025
The financial expectations for full year 2025 have been narrowed to reflect increased full-year visibility
with less than two months to go and to reflect the USD development. The biggest uncertainties to the
expectations are US consumer sentiment, down trading and retailer decisions on inventory levels
across our product categories as well as the development of the USD, which 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 12 November 2025 at 10.00 CEST. Dial-in information and an ac-
companying presentation will be available at investor.st-group.com/investor around 09:00 CEST.
Launch of Five-Year Strategy and Capital Markets Day - 20 November 2025
The five-year strategy Rolling Towards 2025 is coming to an end and as communicated, Scandinavian
Tobacco Group will launch its updated five-year strategy on 20 November 2025, CET 14.00-16.30.
The Group management will host a livestreamed virtual Capital Market Event. Link for more detail and
registration:
https://www.st-group.com/investor/capital-markets-day-2025/
Reported net sales DKK 9.1-9.2 billion (from DKK 9.1-9.5 billion)
EBITDA margin before special items 19-5-20.5% (from 18-22%)
Free cash flow before acquisitions DKK 0.8-1.0 billion
Adjusted EPS DKK 10-12 (from DKK 10-13)
3
Key Figures
DKK million
Q3 2025
Q3 2024
9M 2025
9M 2024
FY2024
INCOME STATEMENT
Net sales
2,357
2,431
6,692
6,745
9,202
Gross profit before special items
1,050
1,126
2,980
3,116
4,279
EBITDA before special items
519
568
1,335
1,483
2,079
Special items
-41
-49
-146
-131
-279
EBIT
366
401
856
1,039
1,380
Net financial items
1
-78
-26
-218
-132
-186
Profit before tax
295
383
657
927
1,219
Income taxes
-68
-86
-151
-208
-280
Net profit
227
297
506
719
940
BALANCE SHEET
Total assets
16,363
16,803
17,104
Equity
8,398
8,698
9,217
Net interest-bearing debt (NIBD)
5,571
5,804
5,423
Investment in property, plant and equipment
47
69
108
169
216
Total capital expenditures
53
84
121
215
264
CASH FLOW STATEMENT
Cash flow from operating activities
223
355
550
530
1,179
Cash flow from investing activities
-50
-565
-106
-774
-824
Free cash flow
173
-210
444
-245
355
Free cash flow before acquisitions
173
275
448
327
931
KEY RATIOS
2
Net sales growth
-3.0%
7.1%
-0.8%
4.5%
5.4%
Gross margin before special items
44.6%
46.3%
44.5%
46.2%
46.5%
EBITDA margin before special items
22.0%
23.4%
19.9%
22.0%
22.6%
Effective tax percentage
23.0%
22.4%
23.0%
22.5%
22.9%
Equity ratio
51.3%
51.8%
53.9%
Cash conversion
106.4%
111.6%
96.4%
86.1%
100.8%
Organic net sales growth
0.3%
-0.1%
-4.0%
0.9%
0.4%
NIBD / EBITDA before special items
2.9
2.9
2.6
ROIC
8.3%
9.8%
9.4%
ROIC ex. Goodwill
12.9%
15.5%
14.7%
Adjusted earnings per share (DKK)
3.4
4.1
8.2
9.9
13.7
Basic earnings per share (DKK)
2.9
3.7
6.4
8.6
11.5
Diluted earnings per share (DKK)
2.9
3.6
6.4
8.6
11.4
Number of shares issued ('000)
80,000
86,000
86,000
Number of treasury shares ('000)
1,266
6,244
7,266
Number of outstanding shares ('000)
3
78,875
83,083
82,162
Share price at balance date (DKK)
87.70
102.8
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
Third Quarter 2025 - Financial performance
Divisional split Q3 2025
Net sales and organic growth EBITDA before special items and margin
Sales
For the Group, the third quarter reported net sales at DKK 2.4 billion was 3% lower than last year
impacted by exchange rates developments by -3%. Organic net sales for the third quarter were in line
with the same quarter in 2024.
By the three reporting divisions the organic net sales performance in the third quarter was -3% in
Europe Branded (“EUB”), 0% in North America Branded & Rest of World (“NABROW”), and 4% in
North America Online & Retail (“NAOR”).
For the first nine months, organic net sales growth in the reporting divisions were -3% in EUB, -4% in
NABROW and -5% in NAOR.
By product categories the organic net sales development in the third quarter was 6% in Handmade
Cigars (“HMC”), -4% in Machine-Rolled Cigars & Smoking Tobacco (“MRCST”) and 23% in Next Gen-
eration Products (“NGP”). Our own nicotine pouch brand, XQS delivered 75% organic net sales
growth.
For the first nine months, organic net sales growth in the product categories were 0% in HMC, -2% in
MRCST and -28% in NGP with the decline driven by the discontinued ZYN distribution and streamlin-
ing of the nicotine pouch business. The XQS brand delivered 45% organic net sales growth.
Table 1: Net sales
Table 2: Free Cash Flow before acquisitions
Q3
Q3
Change
DKK million
2025
2024
in %
Reported net sales
2,357
2,431
-3.0%
Acquisitions
-
Currency development
81
Organic net sales
2,438
2,431
0.3%
Q3
Q3
Change
DKK million
2025
2024
in DKK
EBITDA
519
568
-49
Working Cap. changes
-
-25
25
Investments a.o.
-346
-268
-78
FCF bef. acq.
173
275
-102
Profit and Cash Flow
For the third quarter 2025, EBITDA before special items decreased to DKK 519 million with an EBITDA
margin before special items of 22.0% compared with 23.4% in the same quarter of 2024 and 21.1% in
the second quarter of 2025. The OPEX ratio increased to 23.4% compared with 23.3% in 2024.
34%
35%
31%%
NA Branded &
RoW
Europe Branded
NA Online &
Retail
49%
34%
17%
DKK 2,357m
0.3%
DKK 519m
22.0%
5
Special items amounting to DKK 41 million were expensed in the third quarter of 2025, mainly relating
to the ERP implementation project, “OneProcess” which accounted for DKK 31 million and reorgani-
sations, including the integration of Mac Baren which accounted for DKK 10 million. Net profit declined
to DKK 227 million (DKK 297 million), while Adjusted Earnings Per Share decreased by 17% to DKK
3.4.
The Group’s free cash flow before acquisitions was DKK 173 million (DKK 275 million) in the third
quarter 2025. The development primarily relates to lower operational result and higher financial costs
paid, partly as result of the refinancing of our corporate bond last year. Changes in working capital had
no cash flow impact in the quarter.
Leverage and Return on Invested Capital
By the end of the third 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 14.6 billion compared with DKK 14.7 billion by the end of 2024.
We expect the leverage to improve during the fourth quarter, though still to remain higher than our
target of 2.5 times.
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.
All three growth enablers delivered double-digit organic growth during the quarter with international
sales of handmade cigars recovering from the temporary impact from lower sales to the Asian market
during the first half of the year.
In the third quarter as well as for the first nine months of the year, the Growth Enablers accounted for
11% 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.
The potential claim by the Belgian tax authorities is still pending
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.
6
Expectations for full year 2025
The financial performance during the third quarter of the year and in the beginning of the fourth quarter
support the underlying expectations for the full-year 2025.
The underlying business trends remain largely unchanged. The decline rate in the consumption of
handmade cigars have shown early signs of stabilisation and volumes of machine-rolled cigars in Eu-
rope decreased by a low single-digit percentage, albeit with variations from market to market. The
uncertainty related to US consumer sentiment, down trading and retailer decisions on inventory across
our product categories remain a risk to our full year expectations.
The Group narrows the expectation to reported net sales for 2025 to be in the range of DKK 9.1-9.2
billion from 9.1-9.5 billion. The financial development during the third quarter and in the beginning of
the fourth quarter has been as expected, but as we approach year-end full year visibility has improved.
As we communicated in August, the reported net sales would end in the lower end of the range based
on constant exchange rates for the remainder of the year. The updated range for reported net sales
reflects that the USD has been broadly unchanged since August. The opening of two retail super
stores in the US during the fourth quarter, continued growth of XQS and pricing across the product
categories will support net sales performance in the fourth quarter of the year.
The range for the full-year EBITDA margin is also narrowed to be in the range of 19.5%-20.5% (from
18-22%) reflecting a higher level of visibility for the rest of the year.
Free cash flow is projected at DKK 0.8–1.0 billion. The free cash flow for the full year includes capex
investments of an expected up to DKK 250 million, OneProcess investments and the opening of two
new retail super stores in the US.
Special cash items paid is expected at about DKK 200 million (DKK 189 million YTD 2025), primarily
relating to the Mac Baren integration and roll-out of our SAP 4/Hana ERP solution.
Based on these expectations, the leverage ratio is expected to decrease slightly by year-end compared
to the end of the third quarter of 2025.
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.
Events after the reporting period
There are no other events than those mentioned in the above that have occurred after 30 September
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.
Reported net sales DKK 9.1-9.2 billion (from DKK 9.1-9.5 billion)
EBITDA margin before special items 19.5-20.5% (from 18-22%)
Free cash flow before acquisitions DKK 0.8-1.0 billion
Adjusted EPS DKK 10-12 (from DKK 10-13)
7
Product categories
Net sales distribution and growth by product category
Q3 2025
YTD / 9M 2025
% of
Group
Organic
Growth
Reported
Growth
% of
Group
Organic
Growth
Reported
Growth
Handmade Cigars
37%
6%
-0%
36%
-0%
-3%
Machine-Rolled Cigars & Smoking Tobacco
48%
-4%
-6%
50%
-2%
4%
Next Generation Products
5%
23%
26%
4%
-28%
-9%
Other
10%
-4%
-8%
10%
-14%
-11%
Total
100%
0%
-3%
100%
-4%
-1%
Handmade Cigars
The product category Handmade Cigars accounted for 37% of group net sales in the quarter. Reported
net sales was in line with last year, negatively impacted by the development in the USD, whereas
organic growth in net sales was 6%.
Sales of handmade cigars to wholesalers and distributors in the US recovered compared with previous
quarters delivering low single digit organic net sales growth. Online sales of handmade cigars also
recovered to a low single-digit growth whereas sales through our retail superstores continue to deliver
double-digit growth primarily driven by new store openings. Sales to international markets (excluding
the US) deliver double-digit growth recovering from the decline during the first two quarters of the year.
Machine-Rolled Cigars and Smoking Tobacco
The product category Machine-Rolled Cigars & Smoking Tobacco accounted for 48% of group net
sales in the quarter. Reported net sales decreased by 6% compared with the same quarter last year
primarily with organic growth in net sales being negative by 4%.
Both Machine-Rolled Cigars and Smoking tobacco delivered 6% negative growth in reported net sales
during the quarter. Organic net sales growth for the two product categories was -4% and -5%, respec-
tively.
Preliminary total market data for machine-rolled cigars in our key European markets indicate a volume
decline rate of 0.6% in the third quarter compared to the third quarter last year and a decline of 0.7%
for the first nine months 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 decreased to 26.2% impacted by instability
in supplies primarily related to the SAP roll-out. For the first nine months the market share is estimated
at 26.9%.
Next Generation Products
The product category Next Generation Products accounted for 5% of group net sales in the quarter.
Reported net sales for NGPs increased by 26% compared with the same quarter last year with organic
net sales increasing by 23%. XQS delivered accelerating 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 13%
while the streamlining of the Mac Baren nicotine pouch brands, Ace and Gritt to fewer markets did
impact growth negatively.
8
For the first nine months of the year, reported growth in net sales was -9% and organic growth -28%.
Net sales growth was in the first six months impacted by the discontinuation of the distribution of ZYN
as well as the acquisition of Mac Baren´s nicotine pouch brands Ace and Gritt.
Other
In the third quarter 2025, organic net sales in the category Other, decreased by 4%. The decrease
primarily relates to lower contract manufacturing.
9
Financial performance by division
Net sales distribution and growth by division
Q3 2025
YTD / 9M 2025
% of
Group
Organic
Growth
Reported
Growth
% of
Group
Organic
Growth
Reported
Growth
Europe Branded
35%
-3%
-2%
35%
-3%
6%
North America Branded & Rest of World
34%
0%
-4%
34%
-4%
-1%
North America Online & Retail
31%
4%
-3%
31%
-5%
-7%
Total
100%
0%
-3%
100%
-4%
-1%
Europe Branded
During the third quarter reported net sales decreased by 2% compared to the same quarter last year
with exchange rates impacting reported growth by 0.2%. Organic net sales growth was -3%. Our nic-
otine pouch business delivered double-digit growth, whereas both Handmade Cigars and Machine-
Rolled Cigars & Smoking Tobacco delivered negative growth as in previous quarters.
Third Quarter Development, 2021-2025
For the third quarter EBITDA before special items were unchanged compared with last year with an
EBITDA margin before special items of 22.9% compared with 22.3% in the same quarter last year.
The improvement in the EBITDA margin is a driven by mix changes resulting in a higher gross margin.
The OPEX ratio was unchanged.
For the first nine months of 2025 reported net sales increased to DKK 2.4 billion with an organic growth
of -3%. Reported EBITDA before special items decreased by 3% to DKK 463 million with an EBITDA
margin of 19.5% (21.3%).
North America Branded & Rest of World
During the third quarter reported net sales decreased by 4% compared with the same quarter last year
with exchange rates impacting reported growth negatively by 4%. Organic net sales were unchanged
versus last year. Handmade Cigars recovered and delivered high single-digit organic growth, while
Machine Rolled-Cigars & Smoking Tobacco delivered a low single digit decline in organic net sales
growth.
15%
20%
25%
30%
35%
500
600
700
800
900
Q3 2021 Q3 2022 Q3 2023 Q3 2024 Q3 2025
Net sales and EBITDA margin b.s.i.
Net Sales (DKK million) EBITDA margin
10
Third Quarter Development, 2021-2025
For the third quarter EBITDA before special items decreased by 12% with an EBITDA margin before
special items of 33.0% compared with 36.1% in the same quarter last year. The development in the
profitability was primarily result of mix changes. The mix changes include lower sales of high margin
smoking tobacco products combined with an increase in net sales of handmade cigars to wholesalers
and distributors.
For the first nine months of 2025 reported net sales decreased by 1% to DKK 2.3 billion with an organic
growth of -4%. EBITDA before special items decreased by 10% to DKK 710 million with an EBITDA
margin of 31.5% (34.5%).
North America Online & Retail
During the third quarter reported net sales decreased by 3% compared to the same quarter last year
with exchange rates impacting reported growth by 6%. Organic net sales growth was 4% impacted by
continued good sales performance in our retail stores as well as growth in our online business.
In the online business the twelve months active consumer file was in line with the third quarter, though
still down by 4% compared with the same quarter last year. Competition pressure remains high, though
our pricing strategies start to slowly impact our online market share positively.
The double-digit growth in the retail business was primarily driven by the opening of new super stores
but also an increase in same store sales.
Third Quarter Development, 2021-2025
For the third quarter EBITDA before special items decreased by 8% with an EBITDA margin before
special items of 13.7% compared with 14.6% in the same quarter last year. The decreasing margin is
primarily driven by higher promotional activities.
For the first nine months of 2025 reported net sales decreased by 7% to DKK 2.1 billion with an organic
growth of -5% primarily as result of the discontinuation of the ZYN business impacting growth in the
first two quarters of the year. EBITDA before special items decreased by 20% to DKK 269 million with
25%
30%
35%
40%
45%
500
600
700
800
900
Q3 2021 Q3 2022 Q3 2023 Q3 2024 Q3 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
Q3 2021 Q3 2022 Q3 2023 Q3 2024 Q3 2025
Net sales and EBITDA margin b.s.i.
Net Sales (DKK million) EBITDA margin
11
an EBITDA margin of 13.0% (15.1%). The decrease in the margin being a result of the mentioned
discontinued ZYN distribution by about 0.5%-points and as result of the higher promotional activities
to improve market share.
12
Quarterly Financial Data
2025
DKK million Q3 Q2 Q1 Q4 Q3 9M 9M FY
Reported data
Net sales 2,357 2,361 1,974 2,458 2,431 6,692 6,745 9,202
Gross profit before special items 1,050 1,063 867 1,162 1,126 2,980 3,116 4,279
EBITDA before special items 519 499 317 596 568 1,335 1,483 2,079
Special items -41 -35 -70 -148 -49 -146 -131 -279
EBIT 366 354 136 342 401 856 1,039 1,380
Net financial items -78 -67 -73 -54 -26 -218 -132 -186
Profit before tax 295 295 67 292 383 657 927 1,219
Income taxes -68 -68 -15 -71 -86 -151 -208 -280
Net profit 227 227 52 221 297 506 719 940
Other financial key data
Organic net sales growth 0.3% -4.1% -8.8% -1.0% -0.1% -4.0% 0.9% 0.4%
Gross margin before special items 44.6% 45.0% 43.9% 47.3% 46.3% 44.5% 46.2% 46.5%
EBITDA margin before special items 22.0% 21.1% 16.1% 24.3% 23.4% 19.9% 22.0% 22.6%
Free cash flow before acquisitions 173 119 156 604 275 448 327 931
North America Online & Retail
Net sales 724 730 619 740 743 2,073 2,234 2,973
Gross profit before special items 273 274 252 286 292 799 876 1,164
EBITDA before special items 100 96 74 99 109 269 336 441
Net sales growth -2.5% -13.1% -4.9% 0.2% -0.2% -7.2% 7.1% 5.3%
Organic net sales growth 3.6% -9.8% -9.6% -2.4% -0.9% -5.3% 6.6% 4.2%
Gross margin before special items 37.6% 37.5% 40.8% 38.6% 39.3% 38.5% 39.2% 39.1%
EBITDA margin before special items 13.7% 13.1% 11.9% 13.4% 14.6% 13.0% 15.1% 14.8%
North America Branded & RoW
Net sales 804 780 668 870 837 2,251 2,269 3,139
Gross profit before special items 367 360 330 445 418 1,058 1,147 1,595
EBITDA before special items 265 235 210 342 302 710 783 1,130
Net sales growth -4.0% 3.9% -2.0% 17.1% 3.5% -0.8% -1.4% 3.1%
Organic net sales growth 0.3% -0.5% -13.0% 3.5% -4.8% -4.1% -4.8% -2.6%
Gross margin before special items 45.7% 46.2% 49.5% 51.2% 50.0% 47.0% 50.5% 50.8%
EBITDA margin before special items 33.0% 30.2% 31.4% 39.3% 36.1% 31.5% 34.5% 36.0%
Europe Branded
Net sales 829 851 687 848 850 2,368 2,242 3,090
Gross profit before special items 410 429 284 431 416 1,124 1,093 1,520
EBITDA before special items 190 207 66 183 189 463 477 649
Net sales growth -2.4% 9.9% 11.4% 6.9% 18.8% 5.6% 8.3% 7.9%
Organic net sales growth -2.6% -2.0% -3.7% -4.2% 5.8% -2.7% 1.8% 0.1%
Gross margin before special items 49.5% 50.4% 41.3% 50.8% 48.9% 47.4% 48.8% 49.2%
EBITDA margin before special items 22.9% 24.3% 9.6% 21.6% 22.3% 19.5% 21.3% 21.0%
Group costs
EBITDA before special items -36 -39 -32 -28 -33 -107 -113 -141
2025
2024
2024
13
EXECUTIVE MANAGEMENT
BOARD OF DIRECTORS
14
CONSOLIDATED STATEMENT OF INCOME
1 JANUARY - 30 SEPTEMBER
DKK million
Note
Q3 2025
Q3 2024
9M 2025
9M 2024
INCOME STATEMENT
Net sales
2
Cost of goods sold
2
-1,307.1
-1,304.5
-3,712.1
-3,628.2
Gross profit before special items
2
Other external costs
2
-317.6
-293.8
-880.5
-878.2
Staff costs
2
-232.9
-272.9
-802.0
-783.0
Other income
Earnings before interest, tax, depreciation, amorti-
sation and special items (EBITDA before special
items)
2
Depreciation and impairment
-61.2
-68.9
-185.6
-176.1
Earnings before interest, tax, amortisation and spe-
cial items (EBITA before special items)
Amortisation and impairment
-50.1
-48.9
-147.4
-137.0
Earnings before interest, tax and special items
(EBIT before special items)
Special items, costs and impairment
3
-41.3
-48.8
-145.8
-131.4
Earnings before interest and tax (EBIT)
Share of profit of associated companies, net of tax
Financial income
Financial costs
-86.1
-78.4
-261.0
-216.2
Profit before tax
Income taxes
-67.8
-85.9
-151.0
-208.3
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
-271.0
-663.9
-86.2
Other comprehensive income for the period, net of
tax
-271.0
-663.9
-86.2
Total comprehensive income for the period
-158.1
15
Net sales
In the third quarter of 2025, net sales were DKK 2,357 million (DKK 2,431 million). Adjusted for nega-
tive exchange rate impacts (DKK 81 million) and acquisitions (DKK 0 million), the organic growth in
net sales was positive by 0.3%, primarily driven by positive organic growth in North America Online &
Retail, but also North America Branded & Rest of World delivered positive organic net sales growth
while organic net sales growth in Europe Branded was negative in the quarter.
Profit
Gross profit before special items for the third quarter of 2025 was DKK 1,050 million (DKK 1,126 mil-
lion) mainly driven by negative mix and cost increases. Gross margin before special items decreased
to 44.6% (46.3%).
Operating expenses for the third quarter of 2025 decreased by 2.9% compared to the same quarter
last year and stood at DKK 551 million (DKK 567 million). The OPEX ratio increased to 23.4% (23.3%).
EBITDA before special items for the third quarter of 2025 was DKK 519 million (DKK 568 million). The
development is mainly explained by the lower gross profit.
EBITDA margin before special items for the third quarter of 2025 was 22.0% (23.4%).
During the quarter DKK 41 million (DKK 49 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 third quarter of 2025 was DKK 227 million (DKK 297 million). Earnings Per Share
(EPS) were DKK 2.9 (DKK 3.7). Earnings Per Share adjusted for special items, fair value adjustments
and currency gains/losses, net of tax stood at DKK 3.4 (DKK 4.1).
In the first nine months of 2025, gross profit before special items was DKK 2,980 million (DKK 3,116
million) with a gross margin of 44.5% (46.2%). EBITDA before special items was DKK 1,335 million
(DKK 1,483 million) with an EBITDA margin of 19.9% (22.0%). Special items of DKK 146 million were
expensed (DKK 131 million) and net profit was DKK 506 million (DKK 719 million) with an EPS adjusted
for special items, fair value adjustments and currency gains/losses, net of tax at DKK 8.2 (DKK 9.9).
Third Quarter Development, 2021-2025
10%
14%
18%
22%
26%
30%
1000
1300
1600
1900
2200
2500
Q3 2021 Q3 2022 Q3 2023 Q3 2024 Q3 2025
Net sales and EBITDA margin b.s.i.
Net Sales (DKK million) EBITDA margin
16
CONSOLIDATED BALANCE SHEET
ASSETS
DKK million
30 Sep 2025
30 Sep 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
17
CONSOLIDATED BALANCE SHEET
EQUITY AND LIABILITIES
DKK million
30 Sep 2025
30 Sep 2024
31 Dec 2024
Share capital
Reserve for currency translation
Treasury shares
-36.4
-682.8
-787.8
Retained earnings
Total equity
Borrowings
Deferred income tax liabilities
Pension obligations
Other provisions
Lease liabilities
Other liabilities
Total non-current liabilities
Borrowings
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 148 million to DKK 5,571 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 and 2.9x by the end of the third quarter of 2025. The development was
driven by the decreased EBITDA as well as payment of ordinary dividends.
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 170 million reduction in EBIT (12 months rolling) and driven by the operational perfor-
mance. Invested capital was stable and stood at DKK 14.6 billion (DKK 14.7 billion end of 2024).
18
CONSOLIDATED CASH FLOW STATEMENT
1 JANUARY - 30 SEPTEMBER
DKK million
Q3 2025
Q3 2024
9M 2025
9M 2024
Net profit for the period
Depreciation, amortisation and impairment
Adjustments
Changes in working capital
-0.2
-24.7
-196.5
-302.7
Special items, paid
-57.1
-54.5
-188.9
-121.9
Cash flow from operating activities before financial
items
Financial income received
Financial costs paid
-162.1
-87.6
-243.2
-181.1
Cash flow from operating activities before tax
Tax payments
-63.4
-76.3
-186.1
-357.2
Cash flow from operating activities
Acquisitions
-485.6
-4.3
-571.5
Investment in intangible assets
-6.3
-15.0
-13.1
-46.5
Investment in property, plant and equipment
-47.1
-68.6
-107.5
-168.8
Sale of property, plant and equipment
Dividend from associated companies
Cash flow from investing activities
-49.9
-564.7
-105.9
-774.3
Free cash flow
-210.2
-244.5
Repayment of lease liabilities
-18.0
-37.3
-59.6
-73.6
RCF and bank loan
-354.8
New external funding - bond issuance
Repurchase of bonds
-846.9
-1,355.0
-846.9
-1,355.0
Repayment bank loans
-8.4
-0.9
-10.3
-2.9
Dividend payment
-0.1
-669.3
-709.8
Purchase of treasury shares
-217.0
-650.5
Cash flow from financing activities
-143.0
-495.7
Net cash flow for the period
-52.0
-33.8
Cash and cash equivalents, net at 1 September / 1 January
Exchange gains/losses on cash and cash equivalents
-0.3
-1.6
-10.6
-1.0
Net cash flow for the period
-52.0
-33.8
Cash and cash equivalents, net at 30 September
19
Cash flow
Cash flow from operations before changes in working capital in the third quarter of 2025 was DKK 223
million (DKK 379 million). The development was mainly driven by the operational performance and
higher financial costs in the third quarter of 2025 compared to the same quarter last year. Changes in
working capital in the third quarter of 2025 had a DKK 0 million impact on the cash flow (DKK -25
million).
Cash flow from investing activities in the third quarter of 2025 amounted to DKK -50 million (DKK -565
million). The third quarter of 2025 was mainly impacted by investments in property, plant and equip-
ment, while the same quarter last year was also impacted by the acquisition of Mac Baren.
Cash flow from financing activities in the third quarter of 2025 amounted to DKK -143 million (DKK 268
million). The third quarter of 2025 was mainly impacted by repurchase of bonds issued in 2020, partly
offset by secured additional short-term funding.
Free cash flow before acquisitions in the third quarter of 2025 was positive by DKK 173 million (DKK
275 million). The cash conversion ratio was 106% (112%).
For the first nine months of 2025 cash flow from operations before changes in working capital was
DKK 746 million (DKK 833 million). Working capital had a negative impact of DKK 197 million (DKK -
303 million) mainly coming from a higher level of inventory and receivables only being partly offset by
a higher level of payables.
Free cash flow before acquisitions for the first nine months of 2025 was positive by DKK 448 million
(negative DKK 327 million) and the cash conversion ratio was 96% (86%).
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
-663.9
-663.9
Total other comprehensive income
-663.9
-663.9
Total comprehensive income for the period
-663.9
-158.1
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
-1,406.1
-660.7
Equity at 30 September 2025
-36.4
20
STATEMENT OF CHANGES IN GROUP EQUITY (continued)
Equity
Total shareholders’ equity amounted to DKK 8,398 million on 30 September 2025 (DKK 9,217 million
on 31 December 2024). The equity was negatively impacted by foreign exchange adjustments on net
investments in foreign operations and dividend payments to shareholders being only partly offset by
the positive impact from profit for the period. As of 30 September 2025, the equity ratio was 51.3%
(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
-86.2
-86.2
Total other comprehensive income
-86.2
-86.2
Total comprehensive income for the period
-86.2
Transactions with shareholders
Capital reduction
-1.0
-117.8
Purchase of treasury shares
-660.2
-660.2
Share-based payments
Dividend paid to shareholders
-730.8
-730.8
Dividend, treasury shares
Total transactions with shareholders
-1.0
-541.4
-826.5
-1,368.9
Equity at 30 September 2024
-682.8
21
NOTES
NOTE 1
BASIS OF PREPARATION
The interim consolidated financial statements for the first nine months of 2025, ending 30 September
2025, has been prepared in accordance with IAS 34, Interim Financial Reporting, and additional Dan-
ish 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
9M 2025
North
America
Online &
Retail
North
America
Branded
& RoW
Europe
Branded
Group
costs / not
allocated
Total
DKK million
Net sales
2,073.2
2,251.2
2,368.0
-
6,692.4
Cost of goods sold
-1,274.3
-1,193.4
-1,244.4
-
-3,712.1
Gross profit before special items
798.9
1,057.8
1,123.6
-
2,980.3
Staff and other external costs
-529.7
-384.7
-660.9
-107.2
-1,682.5
Other income
-
36.9
-
-
36.9
EBITDA before special items
269.1
709.9
462.6
-107.2
1,334.7
Depreciation and impairment
-185.6
-185.6
Amortisation and impairment
-147.4
-147.4
EBIT before special items
-440.2
1,001.7
Special items, costs and impairment
-145.8
-145.8
EBIT
-586.0
855.9
Share of profit of associated
companies, net of tax
18.4
18.4
Financial income
43.5
43.5
Financial costs
-261.0
-261.0
Profit before tax
-785.1
656.8
22
NOTE 2
SEGMENT INFORMATION AND NET SALES (continued)
9M 2024
North
America
Online &
Retail
North
America
Branded
& RoW
Europe
Branded
Group
costs /
not allo-
cated
Total
DKK million
Net sales
2,233.8
2,269.2
2,241.6
-
6,744.6
Cost of goods sold
-1,357.5
-1,122.6
-1,148.1
-
-3,628.2
Gross profit before special items
876.3
1,146.6
1,093.5
-
3,116.4
Staff and other external costs
-539.9
-391.4
-616.8
-113.1
-1,661.2
Other income
-
27.8
-
27.8
EBITDA before special items
336.4
783.0
476.7
-113.1
1,483.0
Depreciation and impairment
-176.2
-176.1
Amortisation and impairment
-137.0
-137.0
EBIT before special items
-462.2
1,169.9
Special items, costs and impairment
-131.4
-131.4
EBIT
-557.6
1,038.5
Share of profit of associated
companies, net of tax
20.9
20.9
Financial income
83.8
83.8
Financial costs
-216.2
-216.2
Profit before tax
-669.1
927.0
DKK million
9M 2025
9M 2024
Category split, net sales
Handmade cigars
2,391.6
2,468.9
Machine-rolled cigars & Smoking Tobacco
3,346.8
3,208.4
Next Generation Products
299.6
330.2
Other
654.2
737.1
Total net sales
6,692.2
6,744.6
License income and other sales of DKK 13.4 million (DKK 14.1 million) are included in the category 'Machine-
rolled cigars & Smoking Tobacco'. License income and other sales of DKK 49.0 million (DKK 50.2 million) are
included in the category 'Other'.
DKK million
9M 2025
9M 2024
Geographical split, net sales
Americas
3,446.8
3,691.1
Europe
2,851.5
2,721.9
Rest of World
393.9
331.6
Total net sales
6,692.2
6,744.6
23
NOTE 3
SPECIAL ITEMS
DKK million
9M 2025
9M 2024
Integration and transaction costs (Mac Baren)
25.7
7.0
One Commercial Organisation
4.3
35.8
Solution Delivery Organisation
19.0
-
OneProcess
96.8
88.6
Total special items
145.8
131.4
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.
24
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.