Swedish Match Reports Robust 2Q Sales

Source from:  Tobacco Reporter 07/22/2010

The value of Swedish Match's cigar sales during the three months to the end of June, at SEK1,151 million, was up by two per cent on that of the three months to the end of June 2009. At the same time, sales of snus and snuff were up by three per cent to SEK1,116 million, but sales of chewing tobacco fell by 12 per cent to SEK278 million. The company's total sales were up by one per cent to SEK3,701 million. Meanwhile, sales of snus and snuff during the six months to the end of June, at SEK2,170 million, were increased by six per cent, though sales of cigars were down by nine per cent to SEK2,088 million and sales of chewing tobacco were down by 10 per cent to SEK539 million. Total sales for the six months were down by one per cent to SEK6,983 million. During the second quarter of this year, the profit derived from snus and snuff sales was up by five per cent to SEK487 million, that derived from cigar sales was up by two per cent to SEK286 million, and that derived from chewing tobacco was down by 12 per cent to SEK94 million. And during the first half, the profit derived from snus and snuff sales was up by seven per cent to SEK921 million, that derived from cigar sales was down by 16 per cent to SEK476 million, and that derived from chewing tobacco was down by 19 per cent to SEK183 million. In announcing the company's results, CEO, Lars Dahlgren, said he was pleased to report that SM had posted its best-ever quarterly underlying operating profit, SEK911 million. "During the second quarter we saw continued strong performance in the Scandinavian snus markets," he said. "While overall shipment volumes were flat, volumes backing out Easter effects continued to grow. "The investments for growth in our smoke-free business continued. In Norway, we completed the rollout of Lab Series 01/02 successfully, having now reached close to four per cent market share." Dahlgren said that SM's US mass market cigar business continued to perform very well, with sales and volumes rising to record levels. "For the first six months of the year, mass market cigar volumes are up by nearly 20 per cent," he reported. "In Europe, cigar sales and earnings improved marginally year on year in the second quarter. "The US premium cigar market continued to be soft, with our business through the mail order and Internet with Cigars International outperforming our businesses through traditional retailers." On April 26, SM reached a final agreement with the Scandinavian Tobacco Group (STG) to create a new company, with a focus on cigars, combining the cigar and pipe tobacco businesses of Swedish Match (excluding US mass market cigars and a minority stake in Arnold André) with the cigar, pipe tobacco, and fine cut tobacco businesses of STG. "Final closing is subject to regulatory approvals and is expected before the end of the year," said Dahlgren. "With this agreement with STG, and with our joint venture with PMI [Philip Morris International] for snus outside of Scandinavia and the US, we are well positioned to capture global growth opportunities that lie ahead." Enditem