Scandinavian Tobacco Group A/s Stock Earnings Reports

Scandinavian Tobacco Group (STG) kicked off its Focus2030 strategy in Q1 2026 and reports an orderly start: market share in European machine-rolled cigars has stabilized after prior declines; handmade cigars (notably in the U.S.) grew organically and online/retail contributed; and the nicotine pouch brand XQS continued strong in Sweden and other core markets despite quarter-to-quarter phasing effects. Reported Q1 net sales were DKK 1.9 billion, negatively impacted by a weaker USD (≈ -5.2% FX effect); organic net sales declined 0.6%. EBITDA before special items was flat year-over-year, lifting the EBITDA margin to 17.2% (from 16.1%), while EBIT margin before special items was ~10.4% after increased trademark amortization (expected to reduce margin by ~0.9% for the year). Free cash flow before acquisitions was DKK 158 million and leverage remained at ~3.0x, with management expecting it to approach the 2.5x target by year-end as cash flow improves in H2. Guidance for 2026 is unchanged: group net sales growth at constant currencies of -2% to +2%; EBIT margin before special items of 13.0%–14.5% (including the -0.9% trademark amortization effect); EBITDA before special items roughly in line with DKK 1.8 billion; and free cash flow before acquisitions of DKK 950m–1.2bn. Management emphasizes that Q1 is seasonally small and results are influenced by timing/phasing (notably nicotine pouches), SAP-related disruptions last year distorted comparatives, and geopolitical/economic uncertainty warrants a wide guidance range. Key near-term priorities are stabilizing machine-rolled cigars and smoking tobacco, accelerating growth in handmade cigars (U.S. focus), and scaling nicotine pouches (XQS) while concentrating investment on power brands.