Scandinavian Tobacco Group A/S Reports Third Quarter 2025 Results and Narrows Expectation Ranges for Full-Year

Company Announcement
No. 16/2025

Copenhagen, 11 November 2025

Interim report, 1 January - 30 September 2025

Scandinavian Tobacco Group A/S Reports Third Quarter 2025 Results and Narrows Expectation Ranges for Full-Year.

For the third quarter 2025, reported net sales were DKK 2.4 billion with organic net sales in line with last year. EBITDA before special items was DKK 519 million with an EBITDA margin of 22.0% compared with 23.4% last year. Free cash flow before acquisitions was DKK 173 million and the adjusted EPS were DKK 3.4. The results support the full-year expectations.

The reported net sales were negatively impacted by exchange rate developments. Organic growth was positive in the product categories Handmade Cigars and Next Generation Products, whereas Machine-Rolled Cigars & Smoking Tobacco delivered negative organic growth. The underlying business trends remain largely unchanged, though the decline rate in handmade cigars show early signs of stabilising.

The EBITDA margin before special items continued to recover in the third quarter compared with the first two quarters of the year leaving the margin for the first nine months of the year at 19.9% (22.0%). The decline in the margin compared with last year is driven by a combination of product and market mix and investments in stabilising our market shares in machine-rolled cigars in key European markets. Free cash flow before acquisitions for the first nine months improved to DKK 448 million primarily driven by changes in working capital and lower investments offsetting the decrease in EBITDA.

Third Quarter 2025

• Reported net sales decreased by 3.0% to DKK 2.4 billion (DKK 2.4 billion)
• Organic net sales growth was slightly up by 0.3% (-0.1%)
• EBITDA margin before special items was 22.0% (23.4%)
• Adjusted EPS were DKK 3.4 (DKK 4.1)
• Free cash flow before acquisitions was DKK 173 million (DKK 275 million).

• Return on Invested Capital (ROIC) was 8.3% (9.8%).

First nine months 2025

• Reported net sales decreased by 0.8% to DKK 6.7 billion (DKK 6.7 billion)
• Organic net sales growth was negative by 4.0% (0.9%)
• EBITDA margin before special items was 19.9% (22.0%)
• Adjusted EPS were DKK 8.2 (DKK 9.9)
• Free cash flow before acquisitions was DKK 448 million (DKK 327 million)

CEO Niels Frederiksen commented: "In the third quarter we saw early signs of stable sales but continued margin compression, driven by market and product mix as well as a more intense promotion environment. I am pleased that we have grown both the handmade and the nicotine pouch business in the quarter, but our market share performance in machine-rolled cigars has been negatively impacted by instability created by the roll out of our global SAP solution. On 20 November we will launch our next 5-year strategy and I look forward to sharing details on the Group's ambitions and how we intend to create meaningful value for our stakeholders for the years ahead".

Financial expectations for full year 2025

The financial expectations for full year 2025 have been narrowed to reflect increased full-year visibility with less than two months to go and to reflect the USD development. The biggest uncertainties to the expectations are US consumer sentiment, down trading and retailer decisions on inventory levels across our product categories as well as the development of the USD, which can impact reported net sales.

Guidance and assumptions are based on no impact from potential new acquisitions and at exchange rates as of the reporting date. A 10% change in the USD/DKK exchange rate would impact group net sales by approximately 5 percentage points with EBITDA margins being only marginally impacted.

For further information, please contact:
Torben Sand, Director of IR & Communication, phone [phone], [e-mail].
Eliza Dabbagh, IR & Communications, phone [phone], [e-mail].

A conference call will be held on 12 November 2025 at 10.00 CEST. Dial-in information and an accompanying presentation will be available at investor.st-group.com/investor around 09:00 CEST.

Launch of Five-Year Strategy and Capital Markets Day - 20 November 2025
The five-year strategy Rolling Towards 2025 is coming to an end and as communicated, Scandinavian Tobacco Group will launch its updated five-year strategy on 20 November 2025, CET 14.00-16.30. The Group management will host a livestreamed virtual Capital Market Event. Link for more detail and registration:

https://www.st-group.com/investor/capital-markets-day-2025/