SM's Snus And Snuff Volumes Down

Source from:  Tobacco Reporter 05/07/2012

Swedish Match reported that volume (can) sales of snus and snuff in its Scandinavian markets during the first three months of this year were flat when compared with those of the first quarter of 2011. And volume sales of its snus and snuff were said to be down by four per cent in the US. There was better news in respect of the company's US cigar operations with mass market cigar volumes growing by 36 per cent. But US shipment volumes of the company's own-brand chewing tobacco were down by 11 per cent, while volumes of chewing tobacco products manufactured under contract were said to be 'above prior year levels'. Overall, sales for the first quarter, at SEK2,917 million, were up by 10 per cent on those of the first three months of last year, SEK2,646 million. And they were up by nine per cent in local currencies. Operating profit from 'product areas', which excludes SM's share of net profit in the Scandinavian Tobacco Group, increased by 24 per cent to SEK903 million and in local currencies by 22 per cent. Operating profit including SM's share of net profit in STG, increased by 23 per cent to SEK972 million. In announcing the first quarter results, CEO Lars Dahlgren said SM had delivered strong growth in both sales and operating profit. 'In local currencies, sales increased for all our product areas compared to the first quarter of the prior year, up in total by nine per cent, and, operating profit increased by 22 per cent with particularly strong performance for Scandinavian snus and US mass market cigars,' he said. 'In Scandinavia, the snus business delivered a solid 15 per cent increase in sales and increased profitability despite a mix shift toward more lower priced products in Sweden. 'In the US moist snuff business, while sales were flat on somewhat lower volumes, both operating margin and operating profit grew. 'We continue our investments behind General snus in the US, with an expansion now underway into seven new geographies. Test market activities for snus through SMPM International show promising signs in Canada, and St. Petersburg, Russia. 'Our US mass market cigar business continued to excel during the quarter, with shipment volumes growing by 36 per cent in the quarter, and sales increasing by more than 20 per cent in local currency. 'Our group strategy is to position Swedish Match as the global smoke-free leader, to leverage our strong platforms in other tobacco products - US mass market cigars and chewing tobacco - to maximize long term profitability, to continue our operational excellence for Lights, and, through active ownership, realize the potential of Scandinavian Tobacco Group.' Enditem