Category: Financial

Swedish Match Reports Double-Digit Growth

Photo: Swedish Match
Swedish Match reported sales of SEK4.46 billion ($528.46 million) in the first quarter of 2021, up 11 percent over those in the 2020 first quarter. In local currencies, sales increased by 23 percent.
Reported operating profit from product segments increased by 26 percent to SEK2.09 billion. In local currencies, operating profit from product segments increased by 40 percent.
Operating profit, which includes a settlement income of SEK300 million related to a previously ongoing arbitration concerning nicotine pouches, amounted to SEK2.35 billion.
Profit after tax amounted to SEK1.78 billion.
Continued momentum for ZYN drove strong U.S. performance in the smoke-free product segment. In Scandinavia, strong underlying development was enhanced by timing effects on shipments and Covid-19-related channel mix effects.

We remain encouraged by the strong market growth for the nicotine pouch category as consumers continue to seek satisfying alternatives to cigarettes and other traditional tobacco products.
Lars Dahlgren, CEO, Swedish Match
The cigar business featured record volumes, sales and operating profit on the back of strong category growth and improved price mix.
No major operational Covid-19-related disruptions and Covid-19-related effects in aggregate are estimated to have elevated the reported financial performance.
“Swedish Match delivered an impressive financial performance in the first quarter,” wrote Swedish Match CEO Lars Dahlgren in the company’s interim report. “We remain encouraged by the strong market growth for the nicotine pouch category as consumers continue to seek satisfying alternatives to cigarettes and other traditional tobacco products, and we are excited to be well positioned to participate in this market dynamic.
“I am very pleased with our first-quarter performance and look forward to the opportunities and challenges facing Swedish Match with confidence.”
May 3, 2021
Japan Tobacco Reports ‘Robust’ First Quarter

Photo: JTI
The Japan Tobacco Group reported revenue of ¥547.4 billion ($5.02 billion) for the first quarter of 2021, up 5.3 percent over the revenue reported in the 2020 first quarter. Adjusted operating profit increased 21.3 percent to ¥178.1 billion while operating profit was up 24.2 percent to ¥160.1 billion. At constant currency, adjusted operating profit was ¥186.9 billion, up 27.2 percent from the 2020 quarter.
“JT Group maintained a strong momentum in the tobacco business, mainly fueled by continued market share gains in combustibles in many markets. Furthermore, temporary and favorable industry volume trends in some mature markets resulted in a robust first quarter,” said Masamichi Terabatake, president and CEO of the JT Group, in a statement.

JT Group maintained a strong momentum in the tobacco business, mainly fueled by continued market share gains in combustibles in many markets.
Masamichi Terabatake, president and CEO, JT Group
“As announced in February, we are focusing our management resources on heated-tobacco sticks and are currently preparing the launch of Ploom X, our next-generation device in this category, in the second half of this year. Additionally, we are making steady progress as planned in developing a blueprint of our new operating model and organizational structure for a combined tobacco business from 2022.
“With our robust first-quarter performance, we aim to achieve our full-year forecast. However, we cannot ignore the uncertainties that the Covid-19 pandemic poses, so we will continue to closely monitor the changing operating environment.”
For the full-year 2021, the JT Group expects revenue to decrease by 0.6 percent to ¥2.08 trillion. Consolidated adjusted operating profit at constant currency is expected to increase by 5.1 percent to ¥512 billion.
On a reported basis, adjusted operating profit is forecast to decrease by 2.5 percent to ¥475 billion. Operating profit is forecast to decrease by 22.6 percent to ¥363 billion.
April 30, 2021
Pyxus Secures Working Capital Funding

Photo: Pyxus International
Pyxus International announced that one of its indirect subsidiaries has entered into a term loan credit agreement with the company and certain of its other subsidiaries as guarantors, with certain funds managed by Glendon Capital Management and Monarch Alternative Capital as lenders and Alter Domus (U.S.) as administrative agent and collateral agent.
The credit agreement establishes a $120 million delayed-draw term loan credit facility with a maturity date in July 2022.
“Covid-19 has caused delays in shipment of leaf tobacco, which, as a result, has pushed fulfillment of certain customer orders from the fourth quarter of fiscal 2021 into fiscal 2022,” said Pieter Sikkel, president and CEO of Pyxus International, in a statement.
“The combination of these delays along with increasing customer demand for 2021 crops has created the need for a short-term financing to fund working capital. We anticipate a portion of this loan will be repaid once Covid-19-related delays have been resolved, though a portion may be left outstanding to fund increased purchases of this year’s crop in line with our improving sales expectations.”
April 30, 2021
Altria Reports First-Quarter 2021 Results

Photo: Kristina Blokhin
Altria Group reported net revenues of $6.03 billion in the first quarter of 2021, down 5.1 percent from the comparable 2020 quarter. The decline was driven primarily by lower net revenues in the smokable products segment.
Net revenues net of excise taxes were $4.88 billion, 3.3 percent lower than in last year’s quarter. Reported diluted earnings per share declined 7.2 percent to $0.77, primarily driven by losses on early extinguishment of debt from a debt liability management transaction, a decrease in the estimated fair value of Altria’s investment in Juul and higher acquisition-related costs, partially offset by higher reported operating companies’ income (in the wine segment and favorable Cronos-related and ABI-related special items).
“We are off to a strong start to the year and believe our businesses are on track to deliver against full-year plans. Against a challenging comparison, our tobacco businesses performed well in the first quarter and we continued to make progress advancing our noncombustible portfolio,” said Billy Gifford, Altria’s CEO, in a statement.
“This morning, we announced another important milestone in Altria’s journey in ‘moving beyond smoking.’ We now have full global ownership of On! oral nicotine pouches as we recently closed transactions to acquire the remaining 20 percent global interest.”
“We would like to honor the memory of Tom Farrell, our late chairman of the board. Tom served 13 distinguished years on our board, offered valuable insights and guidance during his tenure and was a true visionary. We will miss his leadership, contributions and friendship.”
In March, Altria Group announced that Thomas F. Farrell II would retire from the company’s board of directors following the completion of his current term. Farrell has been a director of Altria since 2008.
April 29, 2021
TPB Ups Guidance After Strong Quarter

Image: Paulista
Turning Point Brands (TPB) reported net sales of $107.6 million and gross profit of $53.3 million for the first quarter ended March 31, 2021, up 18.7 percent and 28.6 percent, respectively. Net income increased $7.3 million to $11.8 million. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) increased 57.4 percent to $28 million.
“Our first-quarter results demonstrated solid execution with year-over-year growth significantly outpacing our end markets,” said Larry Wexler, president and CEO of TPB, in a statement. “Zig-Zag led the way with a second consecutive quarter with over 40 percent growth, and Stoker’s delivered another double-digit growth quarter led by our MST business. As such, our core segments are continuing to perform well despite the tough comparables from the previous year period.
“NewGen had a solid growth quarter as it maintains optionality for long-term upside through its PMTA submissions.
“We are also excited about our recent investment in Docklight Brands, which increases our exposure in the cannabis space and boosts our portfolio through the addition of the Marley CBD products line.”
Our first-quarter results demonstrated solid execution with year-over-year growth significantly outpacing our end markets.
Larry Wexler, president and CEO, TPB
With the strength of the first-quarter results, TPB is revising its guidance provided on Feb. 10, 2021.
TPB projects net sales of $422 million to $440 million (up from previous guidance of $412 million to $432 million), which assumes strong double-digit sales growth for Zig-Zag products (up from previous guidance of double-digit sales growth); high single-digit sales growth for Stoker’s products (unchanged); mid to low single-digit declines for NewGen products (up from previous guidance of mid-single-digit sales declines), which includes single-digit declines for vape distribution (up from previous guidance of double-digit declines) offset by growth in Nu-X adjusted EBITDA of $103 million to $108 million (up from previous guidance of $99 million to $105 million).
For the second quarter of 2021, TPB projects net sales of $103 million to $109 million.
April 28, 2021
Stora Enso Releases Interim Report

Stora Enso’s headquarters in Helsinki
Stora Enso reported sales of €2.28 billion ($2.75 billion) in the first quarter of 2021, up 3 percent from the previous year’s quarter due to higher deliveries and prices. Operational earnings before interest and tax (EBIT) increased to €328 million due to lower costs. Operational EBIT margin increased to 14.4 percent from 8.1 percent. Operating profit (IFRS) decreased to €161 million.
Cash flow from operations amounted to €185 million. Cash flow after investing activities was -€9 million. The net debt to operational earnings before interest, taxes, depreciation and amortization EBITDA ratio was 2.3.
“For the year’s first quarter, I am pleased to deliver yet another solid result, and we are getting back on track with many of our financial targets,” said Stora Enso President and CEO Annica Bresky in a statement.
“For the full year, the demand outlook continues to be healthy for all businesses except for paper. The operational EBIT in 2021 is expected to be higher than in 2020. We are ahead of plan with our €400 million profit protection program, and it will be concluded already by the end of the second quarter 2021.”
Earlier this month, Stora Enso announced a plan to permanently cease pulp and paper production at its Kvarnsveden and Veitsiluoto mills due to overcapacity resulting from declining demand.
“Closing operations that impact our staff is always a last resort, and one based on thorough evaluations,” said Bresky. “However, in order to remain competitive in a rapidly declining paper market, the closing of unprofitable assets is needed.”
April 26, 2021
Shares Slide on Nicotine Reduction Discussions

Photo: Tumisu from Pixabay
Shares in big tobacco companies plunged on Tuesday following reports that the U.S. government may allow only cigarettes with nonaddictive levels of nicotine and may also ban menthol, reports Bloomberg.
Altria Group fell 6.9 percent Tuesday, losing more than $11 billion in market value since Friday. British American Tobacco (BAT) dropped 8.3 percent in London Tuesday. Analysts estimate BAT derives up to a third of its earnings from menthol brands such as Newport.
In Asia, Japan Tobacco’s stock was near 2 percent lower. Philip Morris International shares, however, ended the day up over 2 percent and the company reported strong results on Tuesday; the company does not sell cigarettes in the U.S.
On Monday, The Wall Street Journal reported that President Joe Biden’s administration is considering new regulations requiring tobacco companies to reduce the nicotine levels in cigarettes sold in the U.S. to the point at which the products are no longer addictive.
Meanwhile, the administration faces a deadline over whether to ban menthol flavoring in traditional and electronic cigarettes.
While the established tobacco sellers took a stock market hit following the news, shares in 22nd Century Group jumped, according to The Motley Fool. The company genetically modifies tobacco plants to contain less nicotine, enabling it to offer low-nicotine cigarettes, alongside growing reduced-cannabinoid cannabis.
22nd Century has staked its existence on persuading the FDA to approve the company marketing and selling very low-nicotine traditional cigarettes. In a press note, 22nd Century said it was prepared to license its reduced nicotine content tobacco technology to every cigarette manufacturer.
April 21, 2021
Higher Revenues, Lower Volumes for PMI

Photo: PMI
Philip Morris International (PMI) reported net revenues of $7.59 billion in the first quarter of 2021, up from $7.15 billion in the comparable 2020 quarter. Operating income was $3.44 billion compared with $2.79 billion in the prior year period. Adjusted operating income amounted to $3.49 billion, up 25.2 percent from the 2020 quarter. PMI reported an adjusted operating income margin of 46 percent in the first quarter of 2021.
The company shipped 167.25 billion cigarettes and heated-tobacco units in the first quarter of 2021, down 3.7 percent from the volume shipped in the first quarter of 2021. Heated-tobacco unit shipments increased 29.9 percent to 21.73 billion from quarter to quarter, while cigarette shipments declined 7.3 percent to 145.51 billion between the reporting periods.

We are pleased to have delivered a very strong start to the year, with top- and bottom-line results coming in well ahead of our expectations.
Andre Calantzopoulos, CEO, PMI
“We are pleased to have delivered a very strong start to the year, with top- and bottom-line results coming in well ahead of our expectations for the first quarter despite the ongoing challenges of the pandemic,” said PMI CEO Andre Calantzopoulos in a statement.
“This performance was driven by the continued strength of IQOS, in particular, reflecting excellent user, volume and market share momentum as well as further progress with manufacturing and operating cost efficiencies. Our results also benefited from the timing of specific factors, notably associated with shipments in certain markets and the phasing of commercial investments, which are expected to partially reverse in the second quarter.”
“While the speed and shape of the global recovery from the pandemic remains uncertain, we are raising our full-year outlook, on an underlying basis, to reflect the strong results and positive momentum of the first quarter. Our guidance now represents organic adjusted diluted EPS growth of 11 percent to 13 percent, reflecting net revenue growth of 5 percent to 7 percent on the same basis.”
April 20, 2021
STG Approves Dividend, Elects Directors

Photo: STG
Scandinavian Tobacco Group held its annual general meeting this week.
Participants adopted the audited annual report and approved the board of directors’ proposal to pay a dividend of DKK6.50 ($1.05) per share of DKK1 for fiscal year 2020.
The remuneration report and the board of directors’ proposal for compensation of the board for financial year 2021 were both approved as well.
Share capital of the company will be reduced by canceling some of the company’s treasury shares of a nominal value of DKK2,500,000. After the reduction, the nominal value of the company’s share capital will be DKK97,500,000.
Company announcements will be released only in English going forward; the company’s release regarding the annual meeting results will be the last release in both Danish and English.
Nigel Northridge (chairman of the board), Henrik Brandt (vice chairman of the board), Dianne Blixt, Marlene Forsell, Claus Gregersen, Luc Missorten and Anders Obel were re-elected to the board of directors. Henrik Amsinck was newly elected to the board.
PricewaterhouseCoopers Statsautoriseret Revisionspartnerskab was re-elected as auditor of the company.
April 15, 2021
Major Bonuses for 22nd Century Executives

Photo: Tobacco Reporter archive
The chief executive of 22nd Century Group received $675,000 bonus, bringing his total compensation for fiscal 2020 to $1.04 million, reports The Winston-Salem Journal, citing a regulatory filing this week.
James Mish became chief executive on June 22.
22nd Century said when Mish was hired that his starting base salary would be $450,000 annually.
President and Chief Operating Officer Michael Zercher received a 26.1 percent jump in salary to $366,451. He was promoted to president during the period before Mish was hired.
Zercher received a $366,100 bonus, stock awards valued at $447,831 and total compensation of $1.21 million, up 20.3 percent.
John Franzino was hired in June as chief financial officer and treasurer. He was paid $158,213 in salary, a $125,000 bonus and total compensation of $435,248.
22nd Century reported a $19.7 million loss for fiscal 2020 compared with a $26.5 million loss in fiscal 2019. The company derives most of its revenue from producing traditional cigarettes for third-party customers.
The company is awaiting a Food and Drug Administration decision on its modified-risk tobacco product application, which would allow it to advertise products as reduced harm or reduced risk compared with traditional cigarettes.
A specialist in low-nicotine cigarettes, 22nd Century expects to benefit greatly from an FDA plan to mandate nonaddictive nicotine levels in cigarettes.
22nd Century will hold a virtual shareholder meeting on May 20.
April 9, 2021