Smokeless making headway
Swedish Match’s volume shipments of snus in Scandinavia during the 12 months to the end of December, at 263.4 million cans, were increased by six percent on those of the year to the end of December 2017, 247.6 million cans.
But despite the volume increase, SM’s share of Sweden’s snus market fell by 2.3 percentage points, from 65.7 percent during 2017 to 63.4 percent during 2018. And it’s share of Norway’s snus market fell by 0.8 of a percentage point to 51.3 percent.
Meanwhile, SM’s volume shipments of moist snuff on the US market during 2018, at 126.3 million cans were down by one percent on those of 2017, 127.4 million cans.
Also in the US, the company’s volume shipments of cigars in 2018, at 1,703 million, were increased by five percent on those of 2017, 1,629 million.
But, during the same period, volume shipments of chewing tobacco, excluding contract manufacturing volumes, at 6,093,000 pounds, were down by four percent from 6,341,000 lb.
SM’s worldwide shipments of matches during 2018, at 64.5 billion sticks, were down by one percent on those of 2017, 65.0 billion sticks.
During the same period, worldwide shipments of lighters fell by nine percent from 368.1 million to 333.9 million.
In announcing its results, SM said that, in local currencies, sales had increased by seven percent for the fourth quarter and by nine percent for the full year. Reported sales had increased by 12 percent to SEK3,301 million for the fourth quarter and by 10 percent to SEK12,966 million for the full year.
In local currencies, operating profit from product segments (excluding larger one-off items and other operations) increased by eight percent for the fourth quarter and by 12 percent for the full year. Reported operating profit from product segments increased by 14 percent to SEK1,246 million for the fourth quarter and by 14 percent to SEK4,936 million for the full year.
Operating profit amounted to SEK1,196 million for the fourth quarter and to SEK4,812 million for the full year.
Profit after tax amounted to SEK925 million for the fourth quarter and to SEK3,578 million for the full year.
Earnings per share increased by six percent to SEK5.41 for the fourth quarter and by nine percent to SEK20.63 for the full year. Adjusted earnings per share increased by 28 percent to SEK5.41 for the fourth quarter and by 26 percent to SEK20.63 for the full year.
In commenting on the results, CEO Lars Dahlgren (pictured) said 2018 had been a successful year for Swedish Match with very healthy growth in sales and operating profit from product segments. “While our base businesses in our two largest product segments performed well, our growth initiatives continued to demonstrate very promising developments, with exceptional momentum for ZYN in the US,” he said.
“More and more, we see evidence of a trend where the global consumption of nicotine products is shifting away from traditional combustible cigarettes, and the best alternatives to cigarettes lie in smokeless products.
“While we continue to believe that the global regulatory stance towards smokeless products is disproportionate given the role that such products can play in harm reduction, we are encouraged to see positive regulatory developments in the smokeless arena and our strategy and focus position us well to compete in pursuit of our vision.”