Tag: Scandinavian Tobacco Group

Henrik Brandt Tapped as Next STG Chairman

Photo: jirsak
Scandinavian Tobacco Group’s (STG) board of directors intends to elect Henrik Brandt as chairman following Nigel Northridge’s decision to retire at the company’s next annual general meeting.
Northridge has informed the board of directors that he will not stand for reelection at the annual general meeting on March 31, 2022.
Northridge joined the board of directors in 2016 and has been chairman of the board of directors since 2017.
Subject to the elections at the annual general meeting in March 2022, the board of directors will elect Brandt as the new chairman of the board of directors. Brandt joined the board in 2017 as vice chairman.
“Nigel has been the chairman during a period of significant change and growth for Scandinavian Tobacco Group,” said Brandt in a statement. “During his tenure, the company has developed from being newly listed to a stronger company with a clear strategy in place for the future. Nigel deserves a lot of credit for having led this development. I also wish to thank the board of directors for their confidence in me as they express their intention to elect me as the future chairman.”
“It has always been my desire to retire in my mid-60s in order to spend more time with my wife and grandchildren,” said Northridge. “I have been honored to chair the board of directors of Scandinavian Tobacco Group for the past five years, and I have throughout enjoyed the cooperation with the board of directors and the strong leadership of the company. I am confident that Scandinavian Tobacco Group is well-positioned for continued growth and development. I wish my successor, my colleagues on the board of directors, the management and all employees of the company the very best for the future.”
Brandt has extensive executive and nonexecutive experience in leading international, publicly listed and private equity businesses. His career has included executive positions at the House of Prince, STG and Royal Unibrew.
In addition to being vice chairman of the board of directors of STG, Brandt is chairman of the board of Toms Gruppen, Fritz Hansen, Intervare and Danish Bake Holding. He is also a member of the board of directors of Ferd Holding, the Gerda and Victor B. Strands Foundation, Gerda and Victor B. Strand Holding and Social Grill.
January 25, 2022
STG Takes Stake in Cigar Manufacturer

Photo: STG
Scandinavian Tobacco Group (STG) has acquired a majority stake in Moderno Opificio del Sigaro Italiano (MOSI), a cigar company with approximately 40 employees and production facilities in Orsago, Italy.
MOSI was founded in 2013 by Cesare Pietrella. The company produces high-quality traditional Italian machine-rolled cigars with a blend of Italian and American Kentucky tobaccos grown on plantations in Northern Italy and in the United States. With a small exclusive offering under the brand Ambasciator Italico, MOSI has gained a market share of approximately 9 percent in Italy for traditional machine-rolled cigars.
“We are excited about this acquisition,” said Jurjan Klep, senior vice president of the Europe branded division in STG, in a statement. “With a majority stake in MOSI, we are acquiring modern cigar-making craftsmanship and a premium brand that will increase our offering to our consumers and the opportunity to take further market share in an important market. This is our fifth acquisition since 2016, and I look forward to further cementing our proven track record of creating value from acquisitions of brands and businesses.”
“Together with Scandinavian Tobacco Group, MOSI and Ambasciator Italico are well positioned for growth, and the acquisition will invigorate the Italian cigar market and benefit Italian cigars smokers, customers and tobacco farmers,” said Cesare Pietrella, founder and president of MOSI.
In related news, STG has restructured its Canadian division, integrating it into its U.S. operations, according to a report by Halfwheel.
Gene Richter, vice president of sales for STG North America, will oversee the Canadian sales team as well as General Cigar Co., Forged Cigar Co. and STG Lane. Cole Patton, with a new role as national sales manager for North American mass market strategic accounts, will oversee the U.S. and Canadian mass market businesses. Mike Restivo, national sales manager of regional accounts for STG Lane, and Jennifer Goodwin, national sales manager for south/west STG Lane, will report to Patton. Marc Rheaume, vice president of sales for STG Canada, left the company.
“We brought these two business units together to deliver untapped growth opportunities,” said Regis Broersma, president and senior vice president of STG’s North America branded and rest of the world division. “Under the new structure, we will work together to capture increased market share while demonstrating an ongoing commitment to building both our Canadian and U.S. businesses.”
November 18, 2021
STG Posts Results in Line With Expectations

Photo: STG
Scandinavian Tobacco Group (STG) reported net sales of DKK2.18 billion ($338.78 million) in the third quarter of 2021 compared with DKK2.231 million in the third quarter of 2020. EBITDA before special items was DKK627 million, up from DKK614 million in the prior-year period. Organic EBITDA growth was positively impacted by a DKK31 million income from certain duty refunds in the U.S.
The results were driven by continued strong demand for handmade cigars in the U.S, a favorable market and product mix, and synergies from the integration of Agio Cigars. Supply issues in Europe impacted net sales negatively in the third quarter.
“We delivered strong quarterly performance in line with expectations and maintain the positive momentum we have had throughout 2020 and 2021,” said STG CEO Niels Frederiksen in a statement.
“The combination of the integration of Agio Cigars, the growth in handmade cigars and our underlying transformation have significantly improved our performance and raised our earnings and margins levels. I remain proud and impressed with the way our organization has continued to deliver a strong performance throughout a challenging period.”
November 5, 2021
Scandinavian Raises Full-Year Guidance

Photo: STG
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.
August 20, 2021
STG Raises Guidance After Strong Quarter

Photo: STG
For the first quarter of 2021, Scandinavian Tobacco Group (STG) delivered a stronger than expected organic growth in net sales and earnings before interest, taxes, depreciation and amortization (EBITDA). The results were driven by a continued high demand in handmade cigars in the U.S., synergies from the integration of Agio Cigars and the transformational program Fueling the Growth, according to STG. Additionally, the results were positively impacted by timing of orders between quarters.
Net sales were DKK1.88 billion ($304.53 million), reflecting with 12.5 percent organic growth. EBITDA before special items was DKK527 million, with 49.1 percent organic growth. The EBITDA margin was 28 percent compared with 18.5 percent in the comparable 2020 quarter.
The integration of Agio Cigars is ahead of plan, according to STG, which has revised expected cost savings upward.
“Demand and consumer behavior remain positively impacted by the Covid-19 pandemic with high consumption of handmade cigars and smoking tobacco products in the U.S.,” the company wrote in a press release. “The integration of Agio Cigars is running ahead of schedule and is now expected to deliver about DKK100 million in synergies for the year and about DKK250 million run-rate by the end of 2022. The combined market shares for machine-rolled cigars in key European markets continue to develop satisfactorily.”

Despite the continued challenges and uncertainty created by the Covid-19 pandemic, our business continues to do well.
Niels Frederiksen, CEO, STG
At the same time, STG noted that Covid-19 is creating significant uncertainty in the second half of the year. “Consumption of handmade cigars and purchasing patterns between online and brick-and-mortar retail stores in the U.S. cannot be forecasted with the normal level of accuracy,” the company stated. “Both are factors with significant impact on the group’s performance. Consequently, a range is introduced for the expected organic EBITDA performance as well as the cash flow before acquisitions.
For 2021, the company now expects organic EBITDA growth in the range of 12 percent to 18 percent, up 7 percent over the earlier forecast.
“Despite the continued challenges and uncertainty created by the Covid-19 pandemic, our business continues to do well,” said STG CEO Niels Frederiksen. “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 across the organization are resulting in strong net sales, growing market shares as well as increased operational performance and efficiency.”
May 6, 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
STG Pleased With 2020 Financial Performance

Photo: STG
Scandinavian Tobacco Group (STG) delivered net sales of DKK8.01 billion ($1.28 billion) and EBITDA before special items of DKK1.83 billion in fiscal year 2020. This corresponds to 6.6 percent organic growth in net sales and 14 percent organic growth in EBITDA. Net profit decreased to DKK678 million from DKK748 million.
While the Covid-19 pandemic created significant challenges across the entire value chain, STG benefitted from its strong online presence combined with increased consumption of handmade cigars in the U.S. The integration of Agio Cigars delivered the expected synergies and the company’s Fueling the Growth program was completed one year ahead of time.
“In a challenging year, we delivered a satisfactory financial performance,” said STG CEO Niels Frederiksen, in a statement accompanying the presentation of the company’s annual report.
“We saw solid operational performance across all three divisions, and we continued to deliver on all major efficiency initiatives ahead of time, but we also benefitted from an increased demand for handmade cigars in the U.S. A genuine team effort.”
In a challenging year, we delivered a satisfactory financial performance.
Niels Frederiksen, CEO, STG
The board of directors proposes an ordinary dividend of DKK6.50 per share for 2020, an increase of 6.6 percent compared to the ordinary dividend for 2019. This will be supplemented by a share buyback program of up to DKK600 million in 2021.
STG expects to generate organic EBITDA growth of more than 7 percent for the full year 2021.
March 10, 2021
Scandinavian Launches Distribution Firm

Photo: STG
Scandinavian Tobacco Group (STG), the parent company of General Cigar Co. and other cigar companies, will launch a new cigar distribution company, the Forged Cigar Co., next month, reports Halfwheel. This company will serve brick-and-mortar retailers.
Scandinavian Tobacco will be splitting its catalog of cigar brands between General Cigar Co. and the new company. Forged Cigar Co. will operate independently from General Cigar Co.
Forged Cigar Co.’s portfolio will include Bolivar (U.S. distribution), Chillin’ Moose, Cofradia, Diesel, La Gloria Cubana (U.S. distribution) and Partagas (U.S. distribution). General Cigar Co.’s portfolio will include CAO, Cohiba (U.S. distribution), Hoyo de Monterrey (U.S. distribution), Macanudo, Punch (U.S. distribution) and other brands.
Forged Cigar Co. could also distribute third-party brands not owned by General Cigar Co.
Forged Cigar Co. will be led by Sean Hardiman, who has worked for General for the last decade and is now the national sales manager for Forged. Forged Cigar Co. will receive “independent marketing and customized programming” initiatives, according to Scandinavian Tobacco.
“When we announced last year our withdrawal from the annual PCA Show, we committed to investing funds back into the premium cigar category,” said Regis Broersma, senior vice president of North American Branded and Rest of World division for Scandinavian Tobacco, in a press release.
“Today, with the Forged Cigar Company, we are doing just that with a multimillion-dollar investment in the brick-and-mortar channel. In having two separate sales companies, we will have more feet on the street to better serve the needs of STG’s retail partners and the ability to be more agile in supporting our current and future brands.”
January 14, 2021
Scandinavian Tobacco Raises 2020 Guidance

Photo: STG
Scandinavian Tobacco Group has raised its full-year guidance for 2020.
According to the company, Covid-19-induced changes in consumer behavior led to higher-than-anticipated consumption of handmade cigars in the U.S. throughout 2020. U.S. demand increased further in the latter part of the year, both online and in stores.
Between January and November 2020, STG’s net sales were 7 percent higher than previously expected.
The higher U.S. volumes have positively impacted operational leverage and resulted in stronger profit margins and an increased organic growth in EBITDA.
STG’s other business categories perform as expected.
Overall, the fourth quarter results continue to be negatively impacted by the loading in previous quarters and very strong comparison numbers partly driven by a change in sales taxes in France in the fourth quarter of 2019.
Meanwhile, an anticipated negative timing impact of payables in the fourth quarter did not materialize.
For the full year 2020, STG anticipates a positive impact on the free cash flow before acquisitions of more than DKK200 million ($32.87 million). The company expects the increased demand for handmade cigars to continue into next year.
December 21, 2020
Strong Quarter for Scandinavian Tobacco

Photo: STG
Net sales of Scandinavian Tobacco Group (STG) grew to DKK2.23 billion ($354.89 million) in the third quarter of 2020, up from DKK1.81 billion in the comparable 2019 period. EBITDA before special items was DKK614 million after 32.5 percent organic growth. The EBITDA margin was 27.5 percent.
STG attributed its performance in part to changes in consumer behavior following the outbreak of the Covid-19 pandemic in the second quarter of 2020, with high tobacco consumption continuing across product categories and markets. In addition to increasing demand for handmade cigars in the U.S., sales of pipe tobacco and fine cut tobacco have performed better in several markets.
While the increased cigar consumption in the U.S. is expected to continue in the near term, STG expects its financial performance in the fourth quarter to be negatively impacted by the loading of net sales in previous quarters and strong comparison numbers partly driven by the change in sales taxing in France in the fourth quarter 2019.
Niels Frederiksen
“We are able to present a very strong result for the third quarter with double-digit growth in net sales, EBITDA and cash flow, said STG CEO Niels Frederiksen in a statement. “However, we maintain our guidance for the full year as we expect our financial performance in the fourth quarter to be negatively impacted by phasing, a temporary increase in the OPEX ratio and strong comparisons numbers.”
November 5, 2020