Q4 2024 Scandinavian Tobacco Group A/S Earnings Call Transcript
Key Points
- Scandinavian Tobacco Group AS (SNDVF) reported net sales exceeding DKK9 billion for the first time, driven by the acquisition of Mac Baren and growth enablers.
- The company returned almost DKK1.5 billion to shareholders through dividends and share buybacks.
- The acquisition of Mac Baren is expected to generate synergies of DKK150 million by 2027, enhancing the company's position in smoking tobacco categories.
- The company's nicotine pouch brand XQS showed high-double-digit growth, particularly in Sweden, contributing positively to the next generation products category.
- Scandinavian Tobacco Group AS (SNDVF) has made significant progress in its sustainability agenda, aligning with the EU corporate sustainability reporting directive.
- The EBITDA margin decreased to 22.6% from the previous year, impacted by investments in growth enablers and market position strengthening.
- The market for handmade cigars in the US remains challenged by uncertain consumer sentiments, with consumption declining by a mid-single digit percentage.
- Machine-rolled cigars in Europe saw a market decline of 2.8%, with uncertainties about whether this trend will continue.
- The company's leverage ratio increased to 2.6 times, up from 1.9 times at the end of 2023, due to capital allocations and the Mac Baren acquisition.
- Scandinavian Tobacco Group AS (SNDVF) does not anticipate initiating a new share buyback during 2025, aiming to maintain flexibility in its capital structure.
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Welcome to all to Scandinavian Tobacco Group's webcast for the full year and fourth-quarter results 2024. My name is Torben Sand, and I am Director of Investor Relations and External Communications, and I am as usual, joined by our CEO, Niels Frederiksen; and our CFO, Marianne Rørslev Bock.
Please turn to slide number 3 for today's webcast agenda. Niels will start the presentation by giving an overview of the highlights of the year, as well as an update on our key strategic achievements. Then he will switch focus to an update on developments in our core markets, as well as insights to recent trends and developments in our product categories.
Marianne will take over an overview of the financial performance in our three commercial reporting divisions, whereafter she will turn the focus to key financial developments for the group, including an update on cash flow, leverage and capital allocation. Niels will conclude the presentation with an update on our financial expectations for 2025
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