Scandinavian Tobacco Group Reports $340M in Q3 2024 Sales, XQS Nicotine Pouches Up 72%

On November 12th, Scandinavian Tobacco Group A/S released their financial report for the third quarter of 2024, which included the Mac Baren brand in their full-year performance expectations.

The report shows that the company's net sales grew by 7.1% in Q3, reaching DKK 2.4 billion ($340 million). Excluding currency fluctuations, organic net sales decreased by 0.1%. 

The cessation of third-party nicotine pouch distribution in the U.S. negatively impacted growth by 1.0%. Growth in machine-made cigars, smoking tobacco, and next-generation products (NGPs) was partially offset by a decline in hand-rolled cigars and accessories. 

NGP brand XQS saw a 72% increase, but due to the absence of nicotine pouch distribution, category growth was reduced to 2%.

The company expects the integration of Mac Baren to be fully effective in the 2027 fiscal year, bringing annual synergies of 150 million Danish Kroner (21.36 million US dollars). In order to achieve the targeted cost synergies, it is expected that there will be a special cost impact of 150 million Danish Kroner in cash.

Key highlights from the report include:

• Net sales of DKK 2.431 billion ($340 million) with organic growth of -0.1%.
• Mac Baren's net sales totaled DKK 159 million ($22.64 million), with EBITDA before special items of DKK 30 million ($4.27 million) and an EBITDA margin of 18.8%.
• For the first nine months of 2024, net sales grew by 4.5% to DKK 6.7 billion ($950 million), with organic net sales growth of 0.9% and an EBITDA margin of 22.0% (down from 24.6%).

The CEO of the company, Niels Frederiksen, said: “With the acquisition of Mac Baren, we are in 2024 on track to surpass DKK 9 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."

"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 UK as well as in Denmark where the brand has recently been introduced," he said.  

"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 DKK 1.5 billion to shareholders over the course of 2024”.