Father's Day Special - Give Dad 2 Years of Cigar Aficionado for the Price of 1!

Cigar Industry

Acquisition Leads to Sales Growth for STG

Handmade cigar sales rise, but machine-made cigar sales fall
Mar 15, 2019 | By David Savona
Acquisition Leads to Sales Growth for STG

Scandinavian Tobacco Group, the parent company of Macanudo maker General Cigar and mega-retailer Cigars International, reported modest increases in sales and profits for 2018.

Net sales were 6.7 billion Danish kroner ($1 billion), up 3.9 percent from the 6.46 billion DKK reported in 2017, thanks in large part to the acquisition of Thompson Cigar in early 2018 for $62 million. Discounting the effects of the acquisition, sales were essentially flat, up 0.4 percent over 2018 levels.

Gross profit rose by 2.7 percent, to 3.219 billion DKK ($488 million), while organic gross profit was flat, at 3.282 billion DKK ($498 million). The term “organic gross profit” indicates the profit margin independent of the acquisition.

Scandinavian Tobacco Group, known as STG, makes and markets all varieties of cigars, but handmade cigar sales are outperforming the other categories. Handmade cigar sales for STG were 2.4 billion DKK ($364 million) in 2018, up 26 percent from 1.9 billion ($288 million) in 2017. Discounting for the acquisition of Thompson, net sales had growth of 5.6 percent. Handmade cigar sales for STG have grown consistently since 2010, with the exception of 2017.

In addition to Macanudo, STG owns such major cigar brands as the non-Cuban versions of Partagas, Hoyo de Monterrey, Punch and La Gloria Cubana.

Machine-made cigars, by contrast, have declined steadily for STG since 2015. They dropped by 5 percent in 2018, as sales from handmade cigars (35 percent) matched those of machine-made cigars (35 percent). Pipe tobacco, fine-cut tobacco and accessories and contract manufacturing made up the balance of sales.

Europe is STG’s most important market, accounting for 51 percent of revenues in 2018. America made up 41 percent of sales, with the rest of the world delivering 8 percent of the company’s revenues.

STG makes its headquarters in Copenhagen, Denmark. General Cigar is headquartered in Richmond, Virginia, and Cigars International is headquartered in Bethlehem, Pennsylvania.

General Cigar Co.

More in Cigar Industry

See all
Drew Estate Cancels Barn Smoker Events and Gives Back to Ticketholders

Drew Estate Cancels Barn Smoker Events and Gives Back to Ticketholders

Drew Estate announced yesterday that it will be canceling its 2020 Barn Smoker events as a result of …

May 22, 2020
Canadian Casa del Habano Closing Permanently

Canadian Casa del Habano Closing Permanently

When businesses re-open in Montreal, cigar lovers are going to have one less place to buy their …

May 21, 2020
PCA Cancels Annual Trade Show Due to Coronavirus

PCA Cancels Annual Trade Show Due to Coronavirus

The Premium Cigar Association has canceled its 2020 trade show, which was scheduled to take place …

May 14, 2020
$1.3 Billion Deal For Imperial’s Premium Cigar Business

$1.3 Billion Deal For Imperial’s Premium Cigar Business

The transaction includes half of Cuba’s Habanos S.A., the world’s largest cigar factory, Tabacalera …

Apr 27, 2020
Régis Broersma Returns to Lead General Cigar Co. as Parent Company Restructures

Régis Broersma Returns to Lead General Cigar Co. as Parent Company Restructures

Scandinavian Tobacco Group, parent company of the General Cigar Company, announced yesterday that …

Apr 24, 2020
Cigar Rights of America Executive Leaving Organization

Cigar Rights of America Executive Leaving Organization

J. Glynn Loope will be leaving his post as executive director of Cigar Rights of America (CRA) on …

Apr 23, 2020