Scandinavian Tobacco Group (STG) has reported on its Q3 results, showing continued positive growth in net sales, earnings and free cash flow before acquisitions. STG says that its good quarter was the result of positive developments in the U.S. market and an increase in the consumption of handmade cigars and strong volume growth in the online business.
The increase in tobacco consumption and categories following the COVID-19 pandemic in the second quarter of the year has continued into the third quarter. In addition to seeing an increase in the demand for handmade cigars, STG also saw sales of pipe tobacco and fine cut tobacco with better performance in certain markets. STG expects the increase demand for cigars in the U.S. to continue in the meantime and notes that despite the positive impacts from efficiency improvements and the integration of Royal Agio Cigars, a temporary increase is expected in the OPEX ratio driven by strategic sales and marketing initiatives.