STG Reports Record Profits, Revenues in 2021

Scandinavian Tobacco Group (STG), the world’s largest publicly-traded premium cigar company set company records for revenue and profit in 2021.

The company says it generated DKK 8.223 billion ($1.2 billion USD) in revenue and earned DKK 1.391 billion ($200 million USD) in profits, both are records for the publicly-traded version of STG, which went public in 2016.

STG is the parent company of Cigars International, General Cigar Co., Thompson Cigar, Forged Cigar Co., Agio, and other businesses throughout the U.S. and international markets.

“We deliver (sic) particularly strong financial results for 2021 based on a strong demand for handmade cigars in the US, Agio synergies and a favorable market mix,” said Niels Frederiksen, ceo of STG, in a statement. “During the year we showed good progress on our strategy ‘Rolling Towards 2025’ across the business and edged closer to our vision of becoming the undisputed, global leader in cigars.”

Quarter	Net Sales (In Millions of DKK)	EBIDTA Before Special Items (In Millions of DKK)	Free Cash Flow (In Millions of DKK)
Q3 2024	2,431	568	275
Q2 2024	2,366	580	177
Q1 2024	1,948	335	(126)
Q4 2023	2,275	517	452
Q3 2023	2,300	602	622
Q2 2023	2,200	514	159
Q1 2023	1,963	474	(179)
Q4 2022	2,185	563	530
Q3 2023	2,362	631	462
Q2 2022	2,278	544	143
Q1 2022	1,938	532	129
Q4 2021	2,012	474	307
Q3 2021	2,182	627	564
Q2 2021	2,156	606	434
Q1 2021	1,883	527	89
Q4 2020	1,992	397	238
Q3 2020	2,231	914	609

To put some context, STG’s profits of DKK 1.391 billion are almost as much as its combined profits in 2019 (DKK 748 million) and 2020 (DKK 678 million).

STG says that sales of its handmade cigars increased by more than 10 percent in 2021 with improved margins. On the flipside, it says the number of active consumers decreased by 7 percent compared to 2020, a clear sign that some of the COVID-19 pandemic sales patterns have come to an end. That being said, the company says that the number of active consumers “remains 15 percent above 2019 levels.”

Online and retail sales actually decreased by 1.6 percent to DKK 2.62 billion ($380 million USD) though STG says that a negative exchange rate effect of 4 percent masked what was 2.4 percent of organic growth. STG says that it believes that the volume of handmade cigars decreases by approximately 1 percent each year, though the COVID-19 pandemic reversed this trend temporarily though STG expects it to resume.

STG has provided the following financial guidance for 2022:

• EBITDA: Organic growth in the range 0-6 percent
• Free cash flow before acquisitions in the range DKK 1.1-1.4 billion
• Adjusted EPS >5 percent increase

The company has also proposed an ordinary of DKK 7.50 ($1.10) per share and another share buy-back program of up to DKK 700 million ($102.31 million USD). Both items will need to be approved at the company’s general meeting on March 31.