Scandinavian Tobacco Group (STG) AGM 2026 presentation summary

Financial performance and shareholder returns

• Net sales for 2025 were DKK 9,036 million, with an EBITDA margin of 19.8% and adjusted EPS of DKK 10.8, reflecting a decline from the previous year.

• Free cash flow before acquisitions was DKK 595 million, down from DKK 931 million in 2024.

• Proposed dividend for 2025 is DKK 4.50 per share, totaling DKK 360 million, with a payout ratio of 42%.

• Capital distribution in 2025 included both dividends and share buybacks, with a target leverage ratio at or below 2.5x.

• Financial expectations for 2026 include net sales growth of -2% to 2%, EBIT margin of 13.0%-14.5%, free cash flow of DKK 950-1,200 million, and adjusted EPS of DKK 9-11.

Business segments and product performance

• Handmade cigars accounted for 35% of net sales, machine-rolled cigars and smoking tobacco 50%, next generation products 5%, and other 10%.

• Handmade cigars saw a reported growth of -4% with a gross margin of 41.4%; machine-rolled cigars and smoking tobacco grew 2% with a gross margin of 50.8%.

• Europe Branded segment contributed 36% of group net sales, North America Branded & ROW 33%, and North America Online & Retail 31%.

• EBITDA margins declined across all segments, with North America Branded & ROW dropping from 36.0% to 31.1%.

Strategic priorities and sustainability

• New five-year strategy, Focus2030, aims to win with handmade cigars in the U.S., lead in machine-rolled cigars in Europe, and build a competitive nicotine pouch business.

• Power brands have been established for both handmade and machine-rolled cigars, with a focus on portfolio simplification and market share growth.

• Sustainability initiatives included reducing Scope 1 & 2 emissions by 7.4%, Scope 3 by 11.5%, and improving CDP score to A-.

• 10% of the long-term incentive program is now linked to emissions reductions aligned with SBTi targets.