Scandinavian Tobacco Group (STG) reported a 7.1 percent increase in net sales to DKK2.4 billion ($338.94 million) for the third quarter of 2024, with an EBITDA margin before special items at 23.4 percent. In a like-for-like comparison and excluding exchange rate developments, organic net sales decreased by 0.1 percent.
Discontinuation of distribution of third-party nicotine pouches in the U.S. impacted growth negatively by 1 percent. Growth in the company’s machine-rolled cigars and smoking tobacco and next generation products (NGP) segment was partly offset by a decline in STG’s handmade cigars and accessories business.
The NGP brand XQS increased 72 percent, though the absence of the distribution of nicotine pouches reduced category growth to 2 percent.
The decrease in the EBITDA margin was a result of STG’s investment to support growth of our its NGP portfolio, the currently lower profitability in Mac Baren and the comparison to a strong third quarter 2023.
With the acquisition of Mac Baren, we are in 2024 on track to surpass DKK9 billion in net sales for the first time ever.
“With the acquisition of Mac Baren, we are in 2024 on track to surpass DKK9 billion in net sales for the first time ever and we expect the Mac Baren acquisition to deliver significant synergies as we implement the integration plan, said STG CEO Niels Frederiksen in a statement.
“In the third quarter market share in machine-rolled cigars in Europe stabilized and began to improve and in particular France showed promising progress. XQS performed well in both Sweden and in U.K. as well as in Denmark where the brand has recently been introduced. The remainder of the growth enablers also delivered growth.
“We remain committed to enhancing shareholder returns and we are about to complete our current share buyback, after which we will have returned almost DKK1.5 billion to shareholders over the course of 2024.”