Sales Dip at Scandinavian Tobacco

Scandinavian Tobacco Group reported net sales of DKK1.95 billion ($281.97 million) for the first quarter of 2024, down 1 percent from the comparable 2023 period. Organically, net sales decreased 2 percent.

Organic net sales growth in the company’s handmade cigars and next-generation oral product categories was offset by decline in machine-rolled cigars and smoking tobacco. The EBITDA margin was impacted by declining volumes in a seasonally small quarter, mix changes and investments in growth, according to the company.

The group expects to deliver organic net sales growth and a material improvement in the EBITDA-margin in the second quarter, and maintains its full-year guidance.

“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,” said CEO Niels Frederiksen in a statement.

“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 percent of net sales in the quarter.”