Scandinavian Tobacco Group reported that net sales for the first quarter of 2024 were 1.95 billion Danish Kroner (approximately 281.97 million US dollars), a 1% decrease compared to the same period in 2023. When calculated by the organic growth rate, net sales decreased by 2%.
The organic net sales growth of the company's handmade cigars and next-generation oral care products categories was offset by the decline in machine-made cigars and smoking tobacco. According to the company, the EBITDA profit margin was affected by a decrease in sales volumes in the seasonal small quarter, mix changes, and growth investments.
The group is expected to achieve organic net sales growth and substantial improvement in EBITDA profit margin in the second quarter, while maintaining its full-year guidance.
"Despite the impact of a mix of factors including cost inflation and growth investments on profitability in the early part of the year and the first quarter, we are still maintaining our expectations for the full year," said CEO Niels Frederiksen in a statement.
As we enter the second quarter, we expect improved growth in net sales. We anticipate a more normalized mix which will have a positive impact on profitability and cash flow. During this quarter, we continued to execute our strategy by opening three Macanudo concept stores and investing in our growth plan. Our growth drivers accounted for approximately 11% of net sales for this quarter.
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