Scandinavian Tobacco Group - July 2020

SCANDINAVIAN TOB ACCO GROUP

DIGITAL REPORT 2020

THE SCIENCE OF PROCUREMENT AT SCANDINAVIAN TOBACCO GROUP

IN ASSOCIATION WITH

02

THE SCIENCE OF PROCUREMENT AT SCANDINAVIAN TOBACCO GROUP WRITTEN BY

SEAN GALEA-PACE

PRODUCED BY

CHARLOTTE CLARKE

03

w w w.st- gro u p . com

S C A N D I N AV I A N T O B A C C O G R O U P

HOW SCANDINAVIAN TOBACCO GROUP’S CULTURAL TRANSFORMATION HAS REIMAGINED AND OPTIMISED THE PROCUREMENT PROCESS

04

H

eadquartered in Copenhagen, Denmark, Scandinavian Tobacco Group (STG) has enjoyed a smooth and consistent level of

success over the years. Originally founded in 1961 as Skandinavisk Tobakskompagni A/S, the company initially housed a full-spectrum of tobacco products, but eventually settled on retaining its cigar, pipe and rolling tobacco businesses after restructuring itself in 2008. Now an internationally recognised company with 6,900 employees and known for producing high-quality, world-renowned products popular in both the US and Europe, STG has pursued a course aimed at maintaining shareholder value by becoming an indisputable leader in the tobacco industry.

05

w w w.st- gro u p . com

OUR BUSINESS IS HOW WE DO BUSINESS Quality Importers Trading Co., Inc. is a B2B product innovator and distributor for some of the industry’s most iconic international brands.

QI also represents a global network of manufacturers specializing in the areas of wooden-ware, plastic injection molding, metal stamping and product packaging. .

OUR MISSION IS TO UNLOCK OUR CUSTOMER’S BUSINESS POTENTIAL BUILD ON A SOLID FOUNDATION During its twenty-plus years of business, while enjoying continuous annual growth, Quality Importers Trading Co., has developed an internal infrastructure and network of global partnerships that has ensured that its customers succeed in calm waters, and prosper even more in times of international economic and political storms, when most cannot. Keeping production and deliveries on schedule helps companies maintain healthy inventory levels that are positioned for growth. External threats to the supply chain caused by economic uncertainty, tariffs and other influences can only be mitigated with sound organization, time-proven processes and experience.

Keeping product flowing from the supply chain onto the distribution channels has proven to be the difference between success and failure, often with no third option.

KEYS TO WEATHERING THE STORM THROUGH STRATEGIC NETWORKS • Closely monitor product production and deliveries to ensure adhesion to schedules • Tight control and visibility on costs • Minimize external threats by managing economic uncertainty and tariffs • Build inventory levels that are positioned for growth while preserving cash flow • Execute with a strong sense of urgency and accuracy.

design distribution

sourcing

PRODUCT LAUNCH

sampling

packaging branding

QI’s balanced and symbiotic integration: from concept to creation.

INVEST IN TIMES OF UNCERTAINTY Making sound business decisions a habit and part of the culture place the company in a position to invest when and where many others may steer away. This strategy has paid off and Quality Importers has taken the initiative to further improve its products and services with a large investment in cloudbased systems with ERP and other resource management tools that will help the company unleash even more of its customers’ potential.

Let’s get started on your future. Contact us now at sales@qualityimporters.com.

1 (954) 602-5637 // www.qualityimporters.com // Instragram: @QualityImporters // Facebook: www.facebook/QITradingCo Twitter: @QITradingCo

S C A N D I N AV I A N T O B A C C O G R O U P

STG has an innovative and consumer-

“ IN ORDER FOR STG TO ACHIEVE ITS GOALS, A STRONG COLLABORATION WITH STAKEHOLDERS AND VENDORS TO ENSURE THAT THEY SHARED A COMMON VISION, GOAL AND STRATEGY IS VITAL”

focused approach to its brand portfolio management that relies on a robust understanding of its consumers across markets and categories, as well as being committed to developing its brands, concepts and products for markets globally. The organisation’s strategy is focused on four main business priorities.

Across categories and markets, these priorities help us create value from our recognised brands, extensive tobacco expertise, global scale, market footprint

08

and supply chain. When rethinking

Scandinavian Tobacco Group: My Ignition: Iris CLICK TO WATCH

|

2:31

09 procurement, the company defined six

STG shares a particularly strong rela-

main principles to ensure its ongoing

tionship with is Quality Importers (QI).

competitiveness: securing supply, main-

A Florida-based company specialising

taining business continuity, simplicity,

in cigar storage and packaging, QI pro-

improving margins, improving networks

vides first-class service to STG and is

and realising targets. By standardis-

considered one of STG’s most reliable

ing its processes in this way, STG was

and trusted partners.

able to increase the transparency of its

During the first quarter of 2020, STG

operations and better measure if it was

delivered net sales of DKK 1,791 mil-

adhering to its own goals.

lion, organic net sales growth of 5%.

In order for STG to achieve its goals,

The first quarter 2020 includes Agio

a strong collaboration with stakehold-

Cigars, which was acquired on January

ers and vendors to ensure that they

2, 2020. The quarter showcased posi-

share a common vision, goal and

tive organic growth in net sales across

strategy is vital. One such vendor that

all four commercial divisions with w w w.st- gro u p . com

S C A N D I N AV I A N T O B A C C O G R O U P

10

11

“ SCANDINAVIAN TOBACCO GROUP ENTERED THE COVID-19 CRISIS FROM A POSITION OF STRENGTH, AND WE WILL REMAIN IN GOOD FINANCIAL HEALTH EVEN THOUGH WE EXPECT A NEGATIVE IMPACT FROM THE COVID-19 CRISIS ON OUR BUSINESS IN 2020”

w w w.st- gro u p . com

S C A N D I N AV I A N T O B A C C O G R O U P

Scandinavian Tobacco Group: From Seed to Handmade Cigar: Harvesting CLICK TO WATCH

|

0:52

12

high growth in Region Machine-Made

“ DURING THE FIRST QUARTER OF 2020, STG DELIVERED NET SALES OF DKK 1,791 MILLION, ORGANIC NET SALES GROWTH OF 5%”

Cigars of 5.2% and in Region Smoking Tobacco & Accessories of 11.6%.

In a press release on the company’s website, Niels Frederiksen, CEO of Scandinavian Tobacco Group, commented: “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

13

have revealed the plans for creating

a negative impact from the COVID-19

significant value with the integration

crisis on our business in 2020. To ensure

of Agio Cigars. During these uniquely

the continued strength of our underlying

challenging times, I have been encour-

business we have reinforced our empha-

aged by the resilience of our business

sis on costs and strengthened our focus

and by the dedication of our employ-

on cash and liquidity.”

ees in keeping our business running

With the goal of being the undisputed

and delivering on our promise to our

leader in a declining market, STG has

consumers and customers.

put itself in a position to remain a major

“Scandinavian Tobacco Group entered

force in cigars and tobacco and grow

the COVID-19 crisis from a position of

organically or through mergers and

strength, and we will remain in good

acquisitions. Through its “Fueling the

financial health even though we expect

Growth” campaign, an emphasis was w w w.st- gro u p . com

S C A N D I N AV I A N T O B A C C O G R O U P

14

put on gathering quality data from which decisions could be made. Fueling the Growth makes STG more agile by removing layers of management and there is now a maximum of seven between CEO and shop floor, when previously there could be up to 12. This will allow for messages across the organisation to be sped up and experts in the sector now take decisions and bring them to market much more efficiently.

With over 200 brands in the company’s portfolio, most recently Royal Agio Cigars, a leading European cigar manufacturer, STG is in the enviable position of being able to retain its valued customers whilst also attracting new ones with its superior products. Of paramount importance to this vision is a rock-solid procurement process which seeks to engage stakeholders and partners and utilise the latest technology.

w w w.st- gro u p . com

15

SCANDINAVIAN TOBACCO GROUP www.st-group.com

P0WERED BY