Strongest Ever Sales Performance at Swedish Match

Source from:  Tobacco Reporter 07/20/2009

Swedish Match's sales for the second quarter of 2009, at SEK3,666 million, were increased by 16 per cent on those of the second quarter of 2008, SEK3,164 million., though they were up by only two per cent in local currencies. At the same time, operating profit was up by 30 per cent to SEK899 million, from SEK691 million, or 13 per cent in local currencies. Sales of snuff in the second quarter increased by 17 per cent to SEK1,087 million and operating profit in this sector increased by 15 per cent to SEK463 million. At the same time, cigar sales were up by 25 per cent to SEK1,129 million and operating profit was up by 53 per cent to SEK281 million. Improved pricing and temporary cost reductions in anticipation of weaker volumes resulted in considerably higher cigar margins in the US. Meanwhile, SM's sales for the first six months, at SEK7,053 million, were 20 per cent up on those of the first six months of 2008, SEK5,857 million. In local currencies, sales increased by six per cent. Operating profit for the first six months, at SEK1,693 million, was up by 43 per cent from SEK1,186 million. Commenting on the results, CEO, Lars Dahlgren, said that in the second quarter the company had delivered the strongest sales performance and, excluding one-time items, the highest operating profit ever. "Compared with the same period last year, sales increased for all product lines, and operating profit increased for all product lines except for lights," he said. "Snus sales and volumes grew in all Scandinavian markets. In the US we continued to gain market share for snuff, and volumes grew by 21 per cent. The strong volume gain was aided by the replenishment of trade inventories following the federal excise tax related destocking at the end of the first quarter. "Our US mass market cigar business delivered an unusually strong operating margin, as increased demand for cigars in the new 'foil fresh' packaging to a large extent compensated for the expected volume drop following the tax related hoarding in the first quarter." Enditem