Scandinavian Tobacco Group (STG) Q1 2026 earnings summary

Executive summary

• Launched Focus2030 strategy, prioritizing stabilization in machine-rolled cigars, growth in handmade cigars, and expansion in nicotine pouches, with initial execution progressing and market share gains in key segments.

• Maintained full-year 2026 financial expectations despite ongoing geopolitical, economic, and regulatory uncertainties.

• Investments focused on Power Brands, including Mehari’s rebranding and Cohiba’s new U.S.-made cigar, and cost improvement initiatives.

• XQS nicotine pouch brand increased market share in Sweden to 13.6% and partnered with Team Parker Racing for brand visibility.

• SAP implementation completed in Europe and Asia, with U.S. rollout planned.

Financial highlights

• Q1 2026 net sales were DKK 1,859 million, down 6% year-over-year, with organic net sales down 0.6% due to a 5.2% negative currency effect and delivery timing.

• EBITDA before special items was DKK 320 million (+1% year-over-year), with margin improving to 17.2% from 16.1%.

• EBIT margin before special items stable at 10.4%, with EBIT at DKK 193 million and a 0.9% negative impact from increased trademark amortization.

• Adjusted EPS was DKK 1.1, down from DKK 1.5 in Q1 2025; net profit was DKK 43 million.

• Free cash flow before acquisitions was DKK 158 million, supported by positive working capital and recovery of receivables.

Outlook and guidance

• 2026 guidance maintained: group net sales growth at constant currencies expected between -2% and +2%.

• EBIT margin before special items forecasted at 13%-14.5%, down from 14.9% in 2025 due to higher amortization.

• Free cash flow before acquisitions projected at DKK 950 million–1.2 billion.

• Adjusted EPS expected in the range DKK 9-11.

• EBITDA before special items expected to be in line with last year’s DKK 1.8 billion.