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Company Announcement No. 23/2021 SCANDINAVIAN TOBACCO GROUP Copenhagen , 5 May 2021 Interim report , 1 January - 31 March 2021 Scandinavian Tobacco Group A / S reports strong Q1 results and raises full year guidance For the first quarter of 2021 , Scandinavian Tobacco Group delivered a stronger than expected or- ganic growth in net sales and EBITDA . The results were driven by a continued high demand in hand- made cigars in the US , synergies from the integration of Agio Cigars and the transformational pro- gramme Fuelling the Growth . Additionally , the results were positively impacted by timing of orders between quarters . Q1 Highlights • Net sales were DKK 1,883 million ( DKK 1,756 million ) with 12.5 % organic growth . • EBITDA before special items was DKK 527 million ( DKK 326 million ) with 49.1 % organic growth . The EBITDA margin was 28.0 % ( 18.5 % ) . • Adjusted Earnings Per Share ( EPS ) were DKK 3.4 ( DKK 1.6 ) . • Free cash flow before acquisitions was DKK 89 million ( DKK 122 million ) . • Return on Invested Capital was 10.7 % ( 7.5 % ) . • The integration of Agio Cigars is ahead of plan . Expected cost savings revised up . Demand and consumer behaviour remain positively impacted by the COVID - 19 pandemic with high consumption of handmade cigars and smoking tobacco products in the US . The integration of Agio Cigars is running ahead of schedule and is now expected to deliver about DKK 100 million in syner- gies for the year and about DKK 250 million run - rate by the end of 2022. The combined market shares for machine - rolled cigars in key European markets continue to develop satisfactorily . The COVID - 19 pandemic is creating significant uncertainty for Scandinavian Tobacco Group in the second half of the year . Consumption of handmade cigars and purchasing patterns between online and brick & mortar retail stores in the US cannot be forecasted with the normal level of accuracy . Both are factors with significant impact on the Group's performance . Consequently , a range is intro- duced for the expected organic EBITDA performance as well as the cash flow before acquisitions . The financial outlook for 2021 has been revised : . EBITDA : Organic growth in the range of 12 % -18 % ( > 7 % ) • Free cash flow before acquisitions : In the range of DKK 1.0-1.3 billion ( > DKK 1.0 billion ) Adjusted Earnings Per Share > 25 % increase ( > 10 % increase ) CEO Niels Frederiksen : " Despite the continued challenges and uncertainty created by the COVID - 19 pandemic , our business continues to do well . For the first quarter of the year we can present strong growth in both net sales and EBITDA . I am particularly pleased to see that numerous initiatives