Scandinavian Tobacco Group (STG) Q2 2026 earnings summary

Executive summary

• Focus2030 strategy execution is progressing, prioritizing stabilization of machine-rolled cigars and smoking tobacco, growth in handmade cigars, and expansion in nicotine pouches.

• Net sales stabilized at DKK 4.2 billion for H1 2026, with a 3% negative currency impact and organic net sales nearly flat.

• Handmade cigars delivered 6% organic net sales growth, while machine-rolled cigars & smoking tobacco declined 4%.

• Divestment of BREAK and Moro brands to Japan Tobacco for DKK 1.3 billion (EUR 176 million), with post-tax proceeds of DKK 1.0 billion, will enhance strategic and financial flexibility.

• The group remains on track to meet full-year 2026 expectations.

Financial highlights

• H1 2026 net sales: DKK 4,193 million, down 3% year-over-year, mainly due to negative currency effects; Q2 2026: DKK 2,334 million, down 1%.

• EBITDA before special items: DKK 835 million (H1), up 2%; margin at 19.9% (H1 2025: 18.8%).

• EBIT margin before special items: 13.8% (H1), up from 13.7% in H1 2025; increased trademark amortization impacted EBIT by DKK 38 million.

• Free cash flow before acquisitions: DKK 422 million (H1), up nearly DKK 150 million year-over-year.

• Leverage ratio at 3.0x, expected to fall below 2.5x after divestment completion.

Outlook and guidance

• 2026 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.

• Free cash flow before acquisitions expected at DKK 950 million–1.2 billion; adjusted EPS DKK 9–11.

• Leverage ratio targeted to move toward 2.5x by year-end, assuming divestment closes.

• Guidance excludes effects from BREAK and Moro divestment.