Profits and Sales Increase at STG
Looking back upon a tumultuous, unpredictable year, European cigar giant Scandinavian Tobacco Group A/S, the owner of Macanudo, CAO, La Gloria Cubana, Diesel and many other handmade cigar brands, as well as the mega retailer Cigars International, had a very good 2020, with increased profits and sales. The company, which is headquartered in Søborg, Denmark and known as STG, released its 2020 earnings this morning.
Net sales increased by 19.2 percent to 8 billion Danish kroner ($1.3 billion), powered in part by increased cigar sales, but especially by the January 2020 acquisition of Royal Agio Cigars, a European maker of slim, small machine-made cigars as well as premium brands such as Balmoral.
Gross profits rose to 3.7 billion kroner ($594 million), up 18.1 percent from 3.1 billion kroner ($503 million) in 2019.
STG has 11,000 employees, and sells cigars and other tobacco products around the world, with more than half of the company’s sales coming from the Americas. One of the key segments to STG is Cigars International, the massive online cigar retailer, which also has large brick-and-mortar stores. Cigar sales in the United States were up for STG, despite the company losing—for a time—revenues from those stores, including three new ones that opened in 2020, in Texas and Florida. The company now has six of those stores. “Overall, the retail super-stores lounges were negatively impacted by the Covid-19 restrictions across the U.S. in 2020,” said the company in the report. Despite that obstacle, consumers bought more cigars than normal last year.
One of the company’s future goals, outlined in the report, is to get bigger in the handmade sector. “We want to grow in handmade cigars. This is our primary investment focus, and we will direct our efforts at driving growth across the business, specifically in North America.”
STG’s premium brands are distributed by its subsidiaries, General Cigar Co. and the newly formed Forged Cigar Co.
The company mentioned increased retail expansion and potential acquisitions and methods for the expansion.
