Scandinavian Tobacco Group A/S ( (SNDVF) ) has released its Q3 earnings. Here is a breakdown of the information Scandinavian Tobacco Group A/S presented to its investors.
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Scandinavian Tobacco Group A/S is a prominent player in the global tobacco industry, known for its production and distribution of cigars and pipe tobacco, as well as next-generation products such as nicotine pouches. The company operates across various international markets and emphasizes innovation within its sector.
In its third-quarter report for 2024, Scandinavian Tobacco Group A/S announced a 7.1% rise in net sales, reaching DKK 2.4 billion. Despite this increase, the company faced challenges, with an organic net sales decline of 0.1% and a decrease in the EBITDA margin to 23.4% from 26.5% in the same quarter of the previous year. The acquisition of Mac Baren Tobacco Company has been consolidated, impacting the company’s financials and strategic outlook.
The company’s financial performance in the third quarter showed mixed results. While reported net sales grew, the EBITDA before special items decreased to DKK 568 million from DKK 602 million a year earlier. The decline in profitability is attributed to strategic investments in the Next Generation Products (NGP) portfolio and the consolidation of Mac Baren. Notably, the NGP brand XQS saw a significant 72% increase, although overall category growth was tempered by the discontinuation of third-party nicotine pouch distribution in the US. The company’s free cash flow before acquisitions dropped significantly, reflecting operational challenges and changes in working capital.
Looking forward, Scandinavian Tobacco Group A/S anticipates slightly declining organic net sales growth in the fourth quarter, maintaining an EBITDA margin similar to the previous year. The integration of Mac Baren is expected to bring annual synergies of DKK 150 million, reaching full effect by 2027. The company remains committed to enhancing shareholder value, as evidenced by its ongoing share buyback program and continued focus on strategic growth areas.
