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1. Company Snapshot

1.a. Company Description

Scandinavian Tobacco Group A/S manufactures and sells cigars and pipe tobacco in the United States, Europe, and internationally.The company offers fine-cut tobacco, and machine-rolled and handmade cigars.It markets its products under the Bali Shag, Balmoral, Borkum Riff, Break, Bugler, Café Crème, CAO, Captain Black, Clan, Cohiba, Colts, Crossroad, Cubero, Erinmore, Escort, Hajenus, Henri Wintermans, Kite, La Gloria Cubana, La Paz, M by Colts, Macanudo, Mehari's, Mercator, Panter, Partagas, Petit, Signature, SLS SALSA, Stanwell, Talon, Tiedemanns, W.Ø. Larsen, and Winchester brand names.


The company sells its products through online, catalogue, and retail channels.In addition, it offers contract manufacturing and licensing services for third parties; and sells accessories.Scandinavian Tobacco Group A/S was founded in 1750 and is based in Gentofte, Denmark.

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1.b. Last Insights on STG

Scandinavian Tobacco Group A/S faced negative drivers over the recent 3 months. The company's full-year net sales decreased 1.8% to DKK 9.0 billion in 2025, with a negative organic growth of 3.1%. Discontinued distribution of third-party nicotine pouch products in its online business further impacted sales. The company's Focus 2030 strategy aims to drive growth in nicotine pouches, but it faces headwinds in the cigar market. A proposed DKK 4.50 dividend per share may be a positive note, but overall, the company's sales decline and negative organic growth are concerning.

1.c. Company Highlights

2. Scandinavian Tobacco: Resilient Earnings Amid Market Headwinds

Scandinavian Tobacco Group reported net sales of DKK 9.36 billion for 2025, surpassing the 9.1‑9.2 billion guidance and reflecting a 4 % decline on a full‑year basis. EBITDA margin before special items held steady at 19.8 %, in line with expectations, while free cash flow before acquisitions fell short by DKK 200 million due to delayed receivables. Adjusted earnings per share reached DKK 10.8, meeting guidance. As CFO Marianne Bock highlighted, free cash flow before acquisitions was DKK 595 million in 2025, down from DKK 931 million in 2024, underscoring the impact of ERP implementation delays.

Publication Date: Apr -17

📋 Highlights
  • Net Sales Performance:: DKK 9.36 billion (DKK 160 million above guidance) with EBITDA margin before special items at 19.8%.
  • Free Cash Flow Discrepancy:: DKK 200 million below guidance due to delayed receivables from ERP implementation, but expected to improve in H1 2026.
  • Nicotine Pouch Growth:: 5% of group sales with 2% reported growth, driven by XQS brand’s 55% organic sales growth and Swedish market share rise to 12.3%.
  • Organic Sales Decline:: -3% overall, with handmade cigars flat, machine-rolled cigars -1%, and nicotine pouches -17% (excluding XQS’s growth).
  • 2026 Guidance:: Net sales growth -2% to +2%, EBIT margin before special items 13-14.5%, and free cash flow DKK 950 million to DKK 1.2 billion.

Market Mix and Segment Performance

The group’s portfolio remains heavily weighted: machine‑rolled cigars and smoking tobacco account for 50 % of net sales, handmade cigars 35 %, nicotine pouches 5 % and other segments 10 %. Organic net sales declined 3 % year‑over‑year, with handmade cigars flat, machine‑rolled and smoking tobacco down 1 %, and nicotine pouches falling 17 % despite a 2 % headline growth driven by the XQS brand’s 55 % organic gain and a 12.3 % share increase in Sweden.

Geopolitical and Currency Headwinds

External disruptions, notably tariffs on handmade cigars and a weakening U.S. dollar, weighed on profitability. The U.S. handmade market contracted by a mid‑single‑digit percentage in 2025, while Europe’s machine‑rolled market declined 1.2 %. These macro factors, combined with promotion pressure, contributed to a steeper gross margin drop to 46 % from 51 % in 2024.

Capital Structure and Return Metrics

The leverage ratio rose to 3.0x by year‑end, prompting a focus on debt reduction to reach a 2.5x target. Return on invested capital fell to 7.9 % from 9.4 %, with an adjusted ROIC of 9.3 % when excluding special items. The company’s dividend payout is set at 42 % of adjusted EPS, translating to DKK 4.5 per share, and a 5.09 % dividend yield.

Valuation Snapshot

Market pricing reflects modest upside potential: P/E of 7.6, P/B of 0.59, P/S of 0.56, EV/EBITDA at 6.16, free cash flow yield of 11.71 %, ROIC 6.54 %, ROE 7.83 % and net debt/EBITDA of 3.14. These ratios suggest the stock trades at a discount relative to peers, yet the company’s strategic focus on stabilizing core segments and expanding nicotine pouches may justify a modest upside within the 2026 guidance framework.

3. NewsRoom

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Scandinavian Tobacco Group: Notification and Public Disclosure of Transactions by Persons Discharging Managerial Responsibilities

Apr -16

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Scandinavian Tobacco Group A/S: Results of the Annual General Meeting

Apr -15

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Scandinavian Tobacco Group A/S. Notice convening the Annual General Meeting

Mar -24

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Scandinavian Tobacco Group AS (SNDVF) Q4 2025 Earnings Call Highlights: Strategic Shifts Amidst ...

Mar -05

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Scandinavian Tobacco Group A/S Reports Full-Year Results and Proposes a DKK 4.50 Dividend Per Share

Mar -04

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Scandinavian Tobacco Group A/S - Proposals for motions to be included in the agenda of the Annual General Meeting

Feb -16

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Scandinavian Tobacco Group announces financial ambitions and new flexible shareholder return policy ahead of Capital Markets Day

Nov -19

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Scandinavian Tobacco Group AS (SNDVF) Q3 2025 Earnings Call Highlights: Navigating Growth ...

Nov -12

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.17%)

6. Segments

North America Branded and Rest of World

Expected Growth: 1.2%

North America Branded growth driven by premiumization, innovation, and market share gains. Rest of World growth fueled by emerging markets' increasing demand for Scandinavian Tobacco Group's products, particularly in Asia and Latin America, as well as expansion into new markets.

Europe Branded

Expected Growth: 0.8%

The 0.8% growth of Europe Branded from Scandinavian Tobacco Group A/S is driven by increasing demand for premium tobacco products, particularly in the Nordic region. Strengthening brand portfolios, such as Cafe Crema and Henrik's, contribute to market share gains. Additionally, strategic pricing and cost-saving initiatives support profitability, offsetting declining volumes in certain markets.

North America Online and Retail

Expected Growth: 1.5%

The 1.5% growth in North America Online and Retail from Scandinavian Tobacco Group A/S is driven by increasing online sales, expansion of e-commerce platforms, and strategic partnerships. Additionally, the growing demand for premium and specialty tobacco products, coupled with effective marketing and promotional strategies, contribute to the segment's growth.

7. Detailed Products

Cigars

Scandinavian Tobacco Group A/S offers a wide range of cigars, including handmade and machine-made cigars, in various flavors and sizes.

Pipe Tobacco

The company provides a variety of pipe tobacco blends, including aromatic, non-aromatic, and flavored options.

Snus

Scandinavian Tobacco Group A/S offers a range of snus products, including portioned and loose snus, in various flavors and strengths.

Chewing Tobacco

The company provides a range of chewing tobacco products, including loose-leaf and pouched options, in various flavors and strengths.

Lighting Products

Scandinavian Tobacco Group A/S offers a range of lighting products, including lighters, matches, and other accessories.

8. Scandinavian Tobacco Group A/S's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Scandinavian Tobacco Group A/S is moderate due to the presence of alternative products such as e-cigarettes and heat-not-burn devices.

Bargaining Power Of Customers

The bargaining power of customers is low due to the fragmented nature of the market and the lack of large-scale buyers.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate due to the presence of a few large suppliers of tobacco and other raw materials.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry, including regulatory hurdles and the need for significant capital investment.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of several established players in the market, leading to intense competition for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 28.26%
Debt Cost 5.89%
Equity Weight 71.74%
Equity Cost 7.83%
WACC 7.28%
Leverage 39.39%

11. Quality Control: Scandinavian Tobacco Group A/S passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
M.P. Evans

A-Score: 7.6/10

Value: 7.3

Growth: 8.0

Quality: 8.1

Yield: 6.9

Momentum: 8.5

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
Imperial Brands

A-Score: 7.5/10

Value: 5.6

Growth: 5.0

Quality: 6.4

Yield: 9.4

Momentum: 9.0

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
Universal

A-Score: 7.0/10

Value: 8.2

Growth: 5.9

Quality: 4.2

Yield: 10.0

Momentum: 5.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Sipef

A-Score: 6.9/10

Value: 6.6

Growth: 5.1

Quality: 7.2

Yield: 3.8

Momentum: 9.5

Volatility: 9.3

1-Year Total Return ->

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Stock-Card
UIE

A-Score: 6.8/10

Value: 4.7

Growth: 4.4

Quality: 8.1

Yield: 7.5

Momentum: 7.5

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
Scandinavian Tobacco Group

A-Score: 6.5/10

Value: 7.6

Growth: 4.0

Quality: 5.4

Yield: 10.0

Momentum: 3.0

Volatility: 9.0

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

71.3$

Current Price

71.3$

Potential

-0.00%

Expected Cash-Flows