Company Announcement
No. 24/2024
Copenhagen, 2 May 2024
Interim report, 1 January - 31 March 2024
Scandinavian Tobacco Group reports first quarter 2024 results and maintains full-year guidance
For the first quarter of 2024 Scandinavian Tobacco Group delivered a 1% decrease
in reported net sales by DKK 1.9 billion with an EBITDA margin before special items at 17.2%. Net sales decreased 2% organically. Organic net sales growth in Handmade Cigars and Next Generation Oral was offset by decline in machine-rolled
cigars & smoking tobacco. The EBITDA margin is impacted by declining volumes in a seasonally small quarter, mix changes and investments in growth. In the second
quarter, the Group is expected to deliver organic net sales growth and a material improvement in the EBITDA-margin compared with the first quarter 2024.
The full year guidance is maintained.
First Quarter 2024 - Financial Performance

  * Net sales of DKK 1,948 million (DKK 1,963 million) with 2% negative organic
    growth.
  * EBITDA before special items was DKK 335 million (DKK 474 million) with an
    EBITDA margin of 17.2% (24.1%).
  * Adjusted Earnings Per Share (EPS) were DKK 1.8 (DKK 3.2).
  * Free cash flow before acquisitions was DKK -126 million (DKK -179 million).
  * Return on Invested Capital (ROIC) was 10.4% (13.6%).
  * Growth Enablers delivered a high double-digit growth rate and accounted for
    11% of Group net sales.

Key events

  * Launch of One Commercial Organisation.
  * Opening of Club Macanudo concept stores in Jakarta, Tapei and
    Louisianaville.

CEO Niels Frederiksen: "Despite a slow start to the year and the first quarter profitability being impacted by mix, cost inflation and investments in growth, we maintain our expectations for the full year. Entering the second quarter, we expect the net sales development to improve and we expect to see a more normalized mix, which will impact profitability and cash-flows positively. In the quarter we have continued to execute our strategy with the opening of three Macanudo concepts stores and investments in our growth initiatives. Our growth enablers constituted around 11% of net sales in the quarter".
Capital Allocation
At the Annual General Meeting on 4 April 2024, the proposal for an increase in
the ordinary dividend of 2% to DKK 8.40 per share was approved. A proposal to
cancel 1.0 million treasury shares was also approved. When the cancellation has
been completed later in May, the number of issued shares will be 86.0 million.
During the quarter the Group repurchased 1,319,050 treasury shares at a total
value of DKK 164 million as part of the up to 850 million share buy-back
programme which was launched November 2023. By the end of the first quarter
Scandinavian Tobacco Group owned a total of 2,423,951 own treasury shares,
corresponding to 2.79% of the total share capital.
Financial Guidance 2024
The financial guidance 2024 is unchanged.

  * Net sales in the range of DKK 8.8-9.1 billion
  * EBITDA margin before special items in the range of 22%-24%
  * Free cash flow before acquisitions in the range DKK 0.8-1.0 billion
  * Adjusted EPS in the range of DKK 12.5-14.5

For further information, please contact:
Torben Sand, Director of IR & Communication, phone +45 5084 7222 or torben.sand@st-group.com
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A conference call will be held on 3 May 2024 at 10.00 CEST. Dial-in information and an accompanying presentation will be available at investor.st- group.com/investor around 09:00 CEST.
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