Scandinavian Tobacco Group (STG) investor relations material

Executive summary

• Focus2030 priorities: stabilize machine-rolled cigars and smoking tobacco, grow handmade cigars, and accelerate Next Generation Products, led by XQS.

• 9M organic sales grew 0.5%; margins and free cash flow improved. FY EBIT margin and adjusted EPS guidance rose, while sales-growth guidance narrowed after the BREAK and Moro divestment.

Financial highlights

• Q3 net sales were DKK 2,434m (+3% YoY; +2.1% organic); EBIT before special items was DKK 484m (+19%), and net profit was DKK 294m (+30%).

• 9M net sales were DKK 6,627m (-1% reported; +0.5% organic); EBITDA before special items was DKK 1,445m (+8%) and EBIT before special items DKK 1,064m (+6%).

• 9M free cash flow before acquisitions was DKK 862m (+92%); adjusted EPS was DKK 8.6 versus DKK 8.2. Q3 adjusted EPS was DKK 4.2 versus DKK 3.4.

• 9M gross margin before special items rose 100bp to 45.5%; EBITDA margin rose to 21.8% from 19.9%. Duty refunds contributed DKK 116m of other income.

Outlook and guidance

• FY26 constant-currency net sales growth guidance narrowed to -2% to 0% from -2% to +2%; BREAK and Moro reduce full-year sales by ~1%.

• FY EBIT margin before special items guidance rose to 14%-15.5% from 13%-14.5%; adjusted EPS guidance increased to DKK 9.5-DKK 11.5 from DKK 9-DKK 11.

• FY free cash flow before acquisitions and divestments guidance remains DKK 1.2bn-DKK 1.4bn; outlook includes ~DKK 200m receivables recovery and ~DKK 200m inventory transfer, partly offset by ~DKK 250m special cash costs.

• Q3 shipment timing benefits are expected to reverse in Q4; second-half organic EBIT and margin are expected to decline YoY. Year-end leverage is expected near 2x.

• EBITDA before special items is expected broadly in line with last year; reported effective tax rate assumption is 23%-24%, and special items are expected at DKK -225m to -275m.