Scandinavian Tobacco Group (STG) has made news in recent months with its acquisition of Royal Agio Cigars finally being completed [read more here] and now it’s reporting on its first quarter, revealing a positive outlook overall for one of the largest tobacco companies in the world.
STG’s first quarter financial report shows positive growth in net sales in all four of the company’s commercial divisions, with high growth in Region Machine-Made Cigars of 5.2 percent and in Region Smoking Tobacco & Accessories, which saw 11.6 percent. The company acknowledged that COVID-19, the pandemic that has gripped the global economy, has had some impact on the company and its products in certain markets, leading to increased sales because of hoarding of tobacco products ahead of restrictions in many regions.
“Excluding these impacts it is estimated that organic net sales growth was slightly positive and organic EBITDA growth was mid-single digit,” the company reports. “For the first four months of 2020, organic net sales growth for Scandinavian Tobacco Group was close to 3 percent with North America Online & Retail partly off-setting declining net sales in other divisions.”
Niels Frederiksen, CEO of STG, added: “In the middle of a unprecedented global pandemic with a high degree of volatility and uncertainty in most markets, we are able to present a solid result for the first three months of 2020 with net sales growth and a strong cash flow as well as we have revealed the plans for creating significant value with the integration of Agio Cigars. During these uniquely challenging times, I have been encouraged by the resilience of our business and by the dedication of our employees in keeping our business running and delivering on our promise to our consumers and customers.”