STG Results ‘in Line with Expectations’

Scandinavian Tobacco Group (STG) delivered net sales of DKK8.7 billion ($1.27 billion) in 2023, down slightly from the previous year.

For the fourth quarter of 2023, net sales were DKK2.3 billion. Organic growth of 5 percent for net sales was driven by the group’s “growth enablers,” which in the fourth quarter accounted for close to 10 percent of group net sales, as well as an improved performance in the machine-rolled cigar business in Europe.

The growth enablers comprise three opportunities that currently represent a small proportion of the group’s overall business but that have significant potential to contribute to greater net sales and earnings, according to STG. They are continued retail expansion in the U.S., international growth in handmade cigars and development of next-generation products, such as nicotine pouches and hemp products in key markets.  

For the full year 2024, net sales are expected to be in the range of DKK8.8 billion to DKK9.1 billion.

“Despite a challenging consumer environment STG delivered solid results for 2023 due to the commitment and performance of our employees across the globe,” said STG CEO Niels Frederiksen in a statement.

“We continued to execute well on our strategy with two acquisitions, and I am particularly happy to see the progress in our growth enablers, where we saw healthy growth in international handmade cigars, retail expansion and next generation products. As we move into 2024, we are increasing our investments in the growth enablers and we expect 2024 to be a year of growth for STG.” 

At the annual general meeting on April 4, 2024, the board of directors will propose an increase in the ordinary dividend of 2 percent to DKK8.40 per share, complementing the up to DKK850 million share buy-back program, which was started in Nov. 2023.

The group’s annual report is here.