Company Announcement No. 11/2020                                                                                                           Copenhagen, 19 May 2020

Scandinavian Tobacco Group A/S reports on first quarter 2020 and presents new guidance for full year 2020 First quarter 2020 highlights

• Net sales of DKK 1,791 million (DKK 1,464 million). Organic growth 5.0%
• EBITDA before special items of DKK 326 million (DKK 239 million). Organic growth 23.9%
• EBITDA margin before special items 18.2% (16.3%)
• Earnings Per Share (EPS) of DKK 0.2 (DKK 0.9). EPS adj. for special items of DKK 1.4 (DKK 1.1)
• Free cash flow before acquisitions of DKK 122 million (DKK 72 million) In the first quarter of 2020, Scandinavian Tobacco Group A/S delivered net sales of DKK 1,791 million, organic net sales growth of 5.0% and EBITDA before special items of DKK 326 million. The first quarter 2020 includes Agio Cigars, which was acquired on January 2, 2020. The quarter delivered positive organic growth in net sales in all four commercial divisions with high growth in Region Machine-Made Cigars of 5.2% and in Region Smoking Tobacco & Accessories of 11.6%. Phasing ahead of excise increases in certain markets and hoarding of tobacco products ahead of various restrictions following COVID-19, impacted the financial performance positively. Excluding these impacts it is estimated that organic net sales growth was slightly positive and organic EBITDA growth was mid-single digit. For the first four months of 2020 organic net sales growth for Scandinavian Tobacco Group was close to 3% with North America Online & Retail partly off-setting declining net sales in the other divisions. CEO of Scandinavian Tobacco Group Niels Frederiksen says: “In the middle of a unprecedented global pandemic with a high degree of volatility and uncertainty in most markets, we are able to present a solid result for the first three months of 2020 with net sales growth and a strong cash flow as well as we have revealed the plans for creating significant value with the integration of Agio Cigars. During these uniquely challenging times, I have been encouraged by the resilience of our business and by the dedication of our employees in keeping our business running and delivering on our promise to our consumers and customers.
  
  Scandinavian Tobacco Group entered the COVID-19 crisis from a position of strength, and we will remain in good financial health even though we expect a negative impact from the COVID-19 crisis on our business in 2020. To ensure the continued strength of our underlying business we have reinforced our emphasis on costs and strengthened our focus on cash and liquidity”. Updated financial guidance for 2020
  On 19 March 2020, Scandinavian Tobacco Group suspended the guidance for the full year due to low visibility following the outbreak of COVID-19. Based on the financial performance in the first quarter and an improved visibility into the second quarter as the implications of COVID-19 have become more clear and with the integration plan of Agio Cigars having been completed, the conditions for releasing an updated guidance have improved. However, it must be stressed that basic assumptions behind a new guidance remain more uncertain than normal.  The financial guidance 2020 includes the financial impact from the acquisition of Agio Cigars. •                     EBITDA: Organic growth > 2% •                     Free cash flow before acquisitions ~DKK 850 million The guidance is based on assumptions of a moderate decline in organic net sales growth for the full year with the highest decline in organic net sales growth in the second quarter and a gradual normalisation over the third and fourth quarter as markets reopens and with no material disruptions to our supply-chain. We expect a contribution from cost savings in relation to the integration of Agio Cigars of about DKK 70-80 million in 2020 as well as further benefits from our Fuelling the Growth program. Special costs are expected to be about DKK 415-435 million, including a non-cash impairment charge of DKK 109 million. The intention to initiate the previously announced share buy-back program at a total value of up to DKK 300 million remains unchanged. Conference Call and Webcast A conference call and webcast will be held on 20 May 2020 at 10:00 AM CET. Presentation materials will be available online approximately one hour before the webcast on investor.st-group.com. Dial-in details: Standard International:          +44 (0) 2071 928338
  Denmark (local):                   +45 32 72 04 17
  UK (local):                            +44 (0) 844 481 9752
  US (local):                            +1646 741 3167
  Passcode:                            8719438
  Webcast URL:                      https://edge.media-server.com/mmc/p/jf2dg6aw For further information, please contact:
  Investors: Torben Sand, Head of Investor Relations,
  phone: +45 5084 7222 or torben.sand@st-group.com Media: Simon Mehl Augustesen, Director of Group Communications,

phone: +1 484-379-8725 or simon.augustesen@st-group.com

Attachment

• Q1 2020 Interim Report