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Cigar Sales Up For Davidoff Group

Gregory Mottola
Posted: June 18, 2013

The Switzerland-based Oettinger Davidoff Group, owners of the Davidoff, Zino Platinum and Avo cigar brands, showed significant growth in 2012 in its cigar segment, although the group's numbers, as a whole, were slightly down for the year.

According to the company's report, sales of its own cigar brands increased worldwide by more than 5 percent last year. The United States, which is Davidoff's largest market, was particularly strong, as Davidoff claimed growth of nearly 20 percent in that market.

The company sold more cigars despite making fewer cigars than in 2011. Davidoff cut its cigar production in 2012 due to its high inventory, making 31.2 million cigars in 2012 compared to 34.4 million in 2011.

Despite the positive numbers in its core cigar segment, Oettinger Davidoff's total revenues decreased by 4.5 percent in 2012, from 1.29 billion Swiss francs ($1.4 billion) to 1.23 billion Swiss francs ($1.33 billion). The decrease was due to a divestiture of some of Davidoff's secondary business segments—particularly the petrol station shop segment—as well as the restructuring of its wholesale and distribution arms.

"We are very satisfied with the progress made in strengthening our core business during the past year," said president and chief executive officer Hans-Kristian Hoejsgaard, who joined the company in 2010. "However the implementation of the strategic realignment of ODG is not yet completed. As a result, the Group will become smaller in terms of turnover, but will be clearly strengthened in terms of its earning power and positioning as a global market leader for premium cigars."

Part of its strategy has included expansion of its cigar brands, flagship cigar stores and airport terminal properties.

By Davidoff's calculations, the Basel, Switzerland, company has approximately an 8 percent global market share in the premium cigar business.

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