Scandinavian Tobacco Group (STG) reported net sales of DKK2.16 billion ($338.61 million) in the second quarter of 2021, with 7.5 percent organic growth from the comparable 2020 quarter. EBITDA before special items was DKK606 million (from DKK489 million in the second quarter of 2020) with 20.8 percent organic growth. The EBITDA margin was 28.1 percent (23.3 percent).
The company attributed its performance to a continued high demand in handmade cigars in the U.S., a favorable market mix and synergies from the integration of Agio Cigars. The second quarter of last year was negatively impacted by the early phases of the Covid-19 pandemic, making comparisons relatively easy.
“We deliver a strong quarterly performance with growth in both net sales and EBITDA driven by strong sales of handmade cigars in the U.S. and a favorable mix,” said STG CEO Niels Frederiksen in a statement. “We expect continued high demand for handmade cigars for the rest of the year, and we are raising our financial expectations for 2021 to reflect that. Additionally, we continue to implement our ‘Rolling toward 2025’ strategy and show good progress on the transformation of the company.”
According to STG, the current high consumption of handmade cigars in the U.S. combined with a strong market mix have driven the extraordinarily strong net sales growth during the first half of 2021. The company expects growth to taper off during the second half of the year as year-on-year comparisons are more difficult, especially in the third quarter and as the market mix is expected to normalize somewhat. However, the full year is now expected to be stronger than previously anticipated, although the risks remain higher than normal due to Covid-19.