Following yesterday’s (July 22) announcement that Japan Tobacco Inc. was acquiring the BREAK and Moro fine-cut tobacco brands from Scandinavian Tobacco Group, the company said the deal is intended to strengthen its combustible tobacco business and support its long-term growth strategy. JT said expanding its fine-cut portfolio in Western Europe will improve returns in its combustibles business, reinforce its position in a key market, and help fund continued investment in reduced-risk products. The company added that the acquisition reflects its disciplined capital allocation strategy and is not expected to have a material impact on its financial performance.
Tag: Scandinavian Tobacco Group
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STG Sells Fine-Cut Tobacco Brands to JT
Scandinavian Tobacco Group agreed to sell its fine-cut tobacco brands BREAK and Moro to Japan Tobacco Inc. for €176 million, representing a pre-tax enterprise value of approximately DKK 1.3 billion ($195 million). The transaction, which is expected to close by year-end pending customary approvals, includes brands primarily sold in Germany. BREAK and Moro accounted for about 4% of STG’s 2025 reported net sales and gross profit before special items, and approximately 6% of EBITDA before special items. Fine-cut tobacco represented around 12% of STG’s total 2025 sales.
STG said the divestment supports its Focus2030 strategy by allowing the company to concentrate on higher-priority growth categories while transferring the brands to an owner better positioned to develop them. CEO Niels Frederiksen said proceeds from the deal will be used to reduce debt, lower leverage, and increase financial flexibility. The agreement also includes a contract manufacturing arrangement with JT for up to three years as STG reviews its manufacturing footprint and efficiency needs.
The transaction is expected to reduce STG’s leverage ratio below its 2.5x target level at completion and will positively impact free cash flow through the transfer of inventories to JT. While the deal is expected to be dilutive to earnings, STG said it does not anticipate an impact on its 2026 guidance for reported net sales growth or EBIT margin before special items.
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Scandinavian Approves Dividend, Board Changes at AGM
Scandinavian Tobacco Group shareholders approved the company’s 2025 annual report and a dividend of DKK 4.50 ($0.72) per share at its annual general meeting, while backing the remuneration report and board compensation for 2026. The AGM also saw the re-election of most board members, and the appointment of Lars Dahlgren, with Henrik Brandt confirmed as chairman. PricewaterhouseCoopers was reappointed as auditor, as the company maintains continuity of governance while returning value to shareholders.
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Scandinavian Announces AGM for April 15
Scandinavian Tobacco Group announced that it has scheduled its annual general meeting for April 15 in Copenhagen, where shareholders will vote on key items, including approval of the 2025 annual report, a proposed dividend of DKK 4.50 ($0.72) per share, board remuneration, and director elections. The board has nominated several members for re-election and proposed Lars Dahlgren as a new director, while also recommending the reappointment of PricewaterhouseCoopers as auditor. Shareholders will be able to attend in person or follow the meeting via webcast, though remote participants will not be able to vote or ask questions.
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Scandinavian Reports Financials, Proposes Dividend
Scandinavian Tobacco Group reported a 1.8% decline in full-year 2025 net sales to DKK 9.0 billion ($1.4 billion), with organic growth down 3.1%, or -1.8% excluding discontinued third-party nicotine pouch distribution in its online business. EBITDA margin before special items was 19.8%, in line with guidance, while free cash flow before acquisitions fell to DKK 595 million ($95.2 million) due to delayed receivables linked to a new ERP rollout in Europe. Adjusted EPS declined to DKK 10.8 from DKK 13.7 ($1.73 from $2.19) a year earlier. The board will propose an ordinary dividend of DKK 4.50 ($0.72) per share, representing a 42% payout ratio. In the fourth quarter, net sales fell 4.6% to DKK 2.3 billion ($368 million), with margin pressure driven by product mix shifts toward nicotine pouches and increased promotional spending in North America.
For 2026, the group expects reported net sales growth at constant exchange rates of between -2% and 2%, EBIT margin before special items of 13.0%–14.5%, free cash flow before acquisitions of DKK 950 million to DKK 1.2 billion ($152 million to $192 million), and adjusted EPS of DKK 9–11. Management said 2026 will focus on earnings stabilization under its Focus2030 strategy, with continued investment in handmade cigars and nicotine pouches, while working capital is expected to normalize in the first half following the ERP-related delays.
See the reports:
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Scandinavian Calls for AGM Proposals
Scandinavian Tobacco Group sent a notice informing shareholders that any proposed motion to be included on the upcoming Annual General Meeting agenda must be received in writing by March 3. Requests can be sent to investor@st-group.com or mailed to Scandinavian Tobacco Group. The AGM is scheduled for April 15.
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Scandinavian Shuffles Cigar Lineups Between Divisions
Effective February 2, Scandinavian Tobacco Group (STG) will reshuffle its U.S. cigar sales structure, transferring five brands between its two internal sales divisions, General Cigar Co. and Forged Cigar Co., according to Halfwheel. Most notably, the non-Cuban Cohiba brand will move from General to Forged, along with Punch and Havana Honeys, as STG seeks to better balance the two divisions. Partagas and Room101 will switch to General.
The restructuring is part of STG’s Focus2030 strategy and is designed to make General and Forged more equal in scale, despite their unusual internal competition model in which sales teams owned by the same company compete directly for the same retail accounts. STG also plans to expand the Forged sales force and has shifted several lower-volume brands—Brioso, Honduran Bundles, and La Estrella Cubana—to its Meier & Dutch wholesale division, with Los Statos Deluxe, Room101 Farce, and Sancho Panza removed from active price lists, but with no other updates given.
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STG Launches Focus2030, Revamps Shareholder Returns
Scandinavian Tobacco Group (STG) unveiled its new five-year strategy, Focus2030, ahead of its Capital Markets Day tomorrow (November 20). The plan aims to strengthen the company’s core machine-rolled and smoking tobacco business in Europe, expand its handmade cigar operations in the U.S., and accelerate growth in the nicotine pouch category.
To support the strategy, STG’s board has adopted new financial ambitions and a flexible shareholder return policy. Targets include a return on invested capital of at least 11% by 2030, low single-digit annual EBIT growth, and free cash flow before acquisitions of at least DKK 1.2 billion ($180 million). The shareholder return framework shifts to a 40–60% dividend payout ratio against adjusted earnings per share, supplemented by share buybacks when leverage allows. Since listing in 2016, STG has returned more than DKK 9 billion ($1.4 billion) to shareholders.
The company also plans DKK 200 million ($30 million) in cost improvements early in the strategy period to bolster efficiency and earnings resilience. CEO Niels Frederiksen said Focus2030 will create long-term value for consumers, employees, and shareholders, positioning STG to drive growth beyond 2030. The Capital Markets Day presentation will be livestreamed from 14:00 to 16:30 CET.
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Scandinavian Reports Q1 Results
Scandinavian Tobacco Group reported its net sales for the first quarter 2025 increased 1.3% to DKK 2 billion ($300 million) with a negative organic net sales growth of 8.8%. EBITDA before special items decreased 5.3% to DKK 317 million ($47.6 million) with an EBITDA margin of 16.1%.
The reported net sales growth was driven primarily by the addition of the Mac Baren business and high double-digit growth in its XQS nicotine pouch brand, the company said. Organic net sales decline was impacted by lower consumption of handmade cigar sales in the U.S. and the discontinuation of online distribution of ZYN in the U.S. Temporary supply issues related to the go-live of SAP in its European factories phased some machine-rolled cigar sales from the first to later quarters.
The U.S. market accounts for approximately 45% of the Group’s net sales. As a consequence of the recent changes in U.S. international trade policy—announced in April and resulting in increased tariffs of currently 10% on imported goods—and due to the translation effect from a lower U.S. dollar exchange rate, Scandinavian is adjusting its financial expectations for the full year 2025. The Group now expects reported net sales for 2025 to be in the range of DKK 9.1–9.5 billion ($1.37–1.43 billion), adjusted from the previous range of DKK 9.2–9.7 billion ($1.38–1.46 billion).
The EBITDA margin decreased 1%-point compared with the first quarter of last year. The decline is driven by a combination of product and market mix, investments in regaining market shares in machine-rolled cigars in key European markets, as well as the expansion of our nicotine pouch business, the company said.
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Net Sales up at Scandinavian Tobacco
Image: STG 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.”