Scandinavian Tobacco Group A/S lifted its 2026 EBIT margin before special items outlook after nine-month performance and larger-than-expected tariff and duty refunds helped offset a narrower sales-growth range.
The group now expects its full-year EBIT margin before special items to be 14% to 15.5%, up from 13% to 14.5%. It narrowed its constant-currency net sales growth range to a decline of 2% to zero, from a previous range spanning a 2% decline to 2% growth. The revised sales range excludes the effect of the fine-cut brands divestment from Oct. 1; the sale of BREAK and Moro has been completed.
Adjusted earnings per share are projected at DKK 9.5 to DKK 11.5, compared with DKK 9 to DKK 11 previously. The forecast for free cash flow before acquisitions is unchanged at DKK 1.2 billion to DKK 1.4 billion.
For the nine months through Sept. 30, reported net sales totaled DKK 6.627 billion, down 1% from a year earlier. Sales grew 0.5% at constant currencies, while exchange-rate effects reduced reported sales by 2%. Machine-Rolled Cigars & Smoking Tobacco recorded flat organic sales, and Handmade Cigars grew 4%.
EBITDA margin before special items rose 190 basis points to 21.8%, with duty refunds contributing 120 basis points to the increase. EBIT margin before special items was 16.1%, up from 15.0%; a change in trademark amortization reduced the margin by 50 basis points. The company generated DKK 862 million in free cash flow before acquisitions, versus DKK 448 million in the same period of 2025. The company linked the improvement to stronger operating contributions, including changes in working capital.
Shipment timing for machine-rolled cigars and smoking tobacco supported the underlying margin in the third quarter. The group expects the timing benefit to reverse and weigh on fourth-quarter results. It expects its leverage ratio to reach about two times by year-end, compared with 2.7 times at the end of the third quarter.
The group is scheduled to discuss the results on a conference call Nov. 12 at 4 a.m. ET (09:00 UTC; 10 a.m. CET).
