Swedish Match’s snus shipments in Scandinavia during the three months to the end of September, at 66.6 million cans, were increased by about eight percent on those of the three months to the end of September 2017, 61.7 million cans.
During the same periods, shipments of moist snuff in the US were down by about six percent to 31.7 million cans, while shipments of snus and nicotine pouches outside Scandinavia were increased by 97 percent to 6.9 million cans.
Swedish Match’s share of the Swedish snus market was down by 2.2 percentage points to 63.2 percent, while its share of Norway’s snus market was down by 1.1 percentage points to 51.0 percent.
The company’s US cigar shipments during the three months to the end of September, at 427 million pieces, were increased by about five percent on those of the three months to the end of September 2017, 405 million pieces.
During the same periods, the company’s chewing tobacco shipments, excluding contract-manufacturing volumes, fell by about seven percent to about 1,526,000 pounds.
Swedish Match reported that, in local currencies, sales increased by 10 percent for the third quarter, while reported sales increased by 16 percent to SEK3,388 million.
Also in local currencies, operating profit from product segments (excluding other operations and larger one-time items) increased by 13 percent, while reported operating profit from product segments increased by 19 percent to SEK1,317 million.
Operating profit amounted to SEK1,305 million, while profit after tax amounted to SEK959 million.
Earnings per share increased by 32 percent to SEK5.55.
In presenting Swedish Match’s three-month and nine-month results, CEO Lars Dahlgren (pictured) said that the company had delivered another quarter of very strong financial results. Sales and operating profit in local currencies had increased for the two largest product segments, snus and moist snuff, and Other tobacco products, while the Lights product segment had had a relatively stable year-on-year performance.
‘Snus and moist snuff product segment sales grew by 12 percent and operating profit increased by 17 percent in local currencies, with strength coming from both our Scandinavian snus business and our snus and nicotine pouches outside Scandinavia,’ he said.
‘Both the Swedish and Norwegian snus market grew at a robust pace compared to the prior year. In particular, we noted an acceleration of category volume growth in Sweden. Intense competitive activity and product innovations within the premium segment have been positive for the development of the snus category. We also believe that the exceptionally warm summer contributed to higher snus consumption this year.
‘The changeover to plain packaging in Norway has gone smoothly, but it is still early to assess if there will be any longer-term category implications.
We estimate that total Scandinavian snus market growth, measured on a volume basis, was close to seven percent during the quarter. On balance we are relatively pleased with the performance of our more recent product introductions in the Scandinavian snus market, but overall our portfolios have lagged category growth in both Sweden and Norway during the quarter. Despite the loss in market share, we estimate that the underlying (excluding V2 Tobacco and Gotlandssnus) volume growth for our Scandinavian snus business reached four percent, a strong growth rate relative to historical levels.
‘For international snus and nicotine pouches, we have now for two consecutive quarters reported positive operating results, stemming from strong volume growth for ZYN, improved pricing, and reduced marketing spending for US snus.
‘With the acquisitions of V2 Tobacco, and more recently Gotlandssnus, we have expanded our portfolio to include a range of unique snus products that not only provide growth opportunities in Scandinavia, but also present an ability to expand our international snus portfolio. In September, we introduced V2’s Thunder Xtreme, a range of strong snus products in the US.
‘Construction efforts directed towards our new ZYN production facility in Owensboro, Kentucky, continue according to plan.
‘Other tobacco products (cigars and chewing tobacco) had another good quarter, with sales and profit growth in cigars more than offsetting declines in sales and profits for our US chewing tobacco business in local currencies.
Cigar shipment growth continued to be driven by our rolled leaf assortment despite the price increase taken earlier in the year.
‘Given the rapid growth within the rolled leaf segment, we are facing increasing challenges in securing certain tobacco supplies but we have implemented measures that we expect will improve the situation during the first half of 2019.
‘The acquisitions of V2 Tobacco and Oliver Twist (with their chew bags and tobacco bits) delivered positive contributions to both sales and operating profit…’
Tag: Sweden
ZYN factory going up
Smuggling snus
Eight people are alleged to have smuggled more than 12 tonnes of snus from Sweden to Finland between 2016 and 2018, according to a story in The Local Europe quoting the Finnish customs authority.
Snus has been banned from sale in the EU since 1992, apart from in Sweden, which negotiated an exemption to the ban when it joined the union in 1995.
The main suspect is said to be a Finnish man in his 50s who lives across the border at Haparanda, Sweden. while a younger person, also residing in Sweden, is alleged to have helped him.
The other suspects live near the Finnish capital and in Kajanaland, eastern Finland.
All eight are accused of smuggling and aggravated tax fraud.
Bringing small amounts of snus into Finland for personal consumption is allowed.
But according to prosecutors, the snus in question – in total 12,700 kg – was bought in Swedish stores and transported in several cars to customers in the Kemi-Torneå area of Finland and then distributed further south in the country.
The alleged smuggling ring was caught when customs officers stopped a van carrying 175 kg of snus in Finland in April this year.
The case is due to go before a Lapland court later this autumn.SM acquires Gotlands
Swedish Match (SM) today signed an agreement to acquire a majority share in Gotlands Snus AB, which has interests in snus and nicotine-free products.
Gotlandssnus was described by SM as a privately-held Swedish company, located in Romakloster, Sweden, on the island of Gotland.
SM said that Gotlandssnus, which was founded in 2002 and which had annual sales of about SEK50 million, developed, produced, and sold snus and nicotine-free products.
It had sales in Sweden, other parts of Europe, the US and Asia.
‘The company sells popular brands such as Jakobsson’s snus and Qvitt (nicotine and tobacco free pouches),’ SM said in a press note posted on its website. ‘Gotlandssnus produces approximately four million cans per year. The production facility and head office are located in Romakloster, in the heart of Gotland. The company has approximately 40 employees.’
“Under the leadership of its founder, Henrik Jakobsson, Gotlandssnus has successfully grown its market presence through its portfolio of premium, high-quality snus and tobacco/nicotine free products by leveraging the unique heritage of the island of Gotland,” Lars Dahlgren, president and CEO of Swedish Match was quoted as saying. “We look forward to further developing this business together with Henrik and his team, and to enhancing our presence with production in Gotland. Gotlandssnus is an excellent complement to our current portfolio and will provide increased depth to our offerings.”
Meanwhile, Jakobsson said Gotlandssnus was delighted to have SM as a partner, and looked forward to continued growth of its products.
Jakobsson will remain the MD of Gotlandssnus and a minority shareholder.
The transaction is planned to be completed on August 22.
Details of the purchase price were not disclosed.Snus sales increased
Swedish Match’s Scandinavian shipment volumes of snus during the first quarter to the end of March, at 61.5 million cans, were up by about nine percent on those of the first quarter of last year, 56.5 million.
At the same time, the company’s shipment volume of moist snuff in the US, at 34.0 million cans, was down by about two percent from 34.6 million.
And its volumes of snus and nicotine pouches outside Scandinavia were up by 95 percent to 4.8 million cans.
In announcing its first-quarter results, SM said that it had accounted for a 64.1 percent share of Sweden’s snus market during the first quarter of this year, down 1.7 percentage points from that of the first quarter of 2017.
Its share of Sweden’s premium snus sector had fallen by 2.7 percentage points to 89.3 percent; its share of Sweden’s value snus sector had fallen by 1.6 percentage points to 35.2 percent; and its share of Norway’s snus market had fallen by 0.1 of a percentage point to 52.2 percent.
Meanwhile, in the US, SM’s cigar shipment volume during the first quarter, at 429 million, was increased by about eight percent on that of the first quarter of 2017, 398 million. And its chewing tobacco volume (excluding contract manufacturing volumes) during the first quarter, at 1,568,000 pounds, was down by about six percent on that of the first quarter of 2017, 1,663,000 pounds.
SM’s worldwide shipment volumes of matches during the first quarter, at 15.8 billion sticks, were down by about 11 percent on those of the first quarter of 2017, 17.7 billion.
And its worldwide shipment volumes of lighters, at 73.1 million, were down by about 23 percent from 95.3 million.
Sales at SM during the first quarter, at SEK2,941 million, were increased by about four percent on the restated sales of the first quarter of 2017, SEK2,833 million.
Operating profit from product segments (excluding other operations and larger one-off items) increased by six percent, from SEK1,021 million (restated) to SEK1,079 million.
Operating profit was down by 15 percent, from SEK1,235 million (restated) to SEK1,047 million.
In announcing the results, CEO Lars Dahlgren (pictured) said the first quarter had represented a strong start to the year.
“In local currencies, sales increased by 10 percent and operating profit from product segments, excluding larger one-time items, increased by 11 percent.
“While our financial results were favorably influenced by calendar and shipment timing effects, I am pleased with our underlying performance for the quarter,” he said.Oliver Twist changing hands
Swedish Match (SM) said on Friday that it was acquiring the House of Oliver Twist, a privately held Danish smokeless tobacco company, headquartered in Odense, Denmark.
‘House of Oliver Twist (HoOT) has over 200 years of history and is Denmark’s oldest independent tobacco manufacturer,’ SM said in a note posted on its website.
‘The company develops, produces and sells chewing tobacco bits made of processed tobacco strands under the brand Oliver Twist.
‘The company’s main markets are in Scandinavia and certain other EU countries.
‘The company has 33 employees and annual revenues amount to approximately DKK60 million.’
The sale is expected to be completed on April 3.
“Oliver Twist is a good complement to our smokeless portfolio and will provide increased depth to our chewing tobacco offerings, especially in Europe,” said Lars Dahlgren (pictured), SM’s president.
Meanwhile, Michael Drest Nielsen, the present owner of HoOT was quoted as saying that it had been important for his company to find a buyer that shared the HoOT’s vision for smokeless tobacco. “With their resources, competence and knowledge within smokeless tobacco, Swedish Match will give Oliver Twist better opportunities to develop and grow.”
Details of the purchase price have not been disclosed.SM snus volumes up
Swedish Match’s volume shipments of snus in Scandinavia during the 12 months to the end of December, at 247.6 million cans, were increased by three percent on those of the year to the end of December 2016, 241.3 million cans.
But despite the volume increase, SM’s share of Sweden’s snus market fell by 2.1 percentage points, from 67.3 percent during 2016 to 65.2 percent during 2017. And it’s share of Norway’s snus market fell by 1.4 percentage points to 52.1 percent.
Meanwhile, SM’s volume shipments of moist snuff on the US market during 2017, at 127.4 million cans were down by three percent on those of 2016, 131.4 million cans.
Also in the US, the company’s volume shipments of cigars in 2017, at 1,629 million, were increased by 11 percent on those of 2016, 1,472 million.
But, during the same period, volume shipments of chewing tobacco, excluding contract manufacturing volumes, at 6,341,000 pounds, were down by five percent from 6,709,000 lb.
SM’s worldwide shipments of matches during 2017, at 65.0 billion sticks, were down by 10 percent on those of 2016, 72.0 billion sticks.
During the same period, worldwide shipments of lighters fell by eight percent from 399.2 million to 368.1 million.
In announcing its results, SM said that, in local currencies, sales had increased by six percent for the fourth quarter and by thee percent for the full year. Reported sales had increased by two percent to SEK4,044 million for the fourth quarter and by four percent to SEK16,101 million for the full year.
In local currencies, operating profit from product areas (excluding larger one-off items and a share of the net profit of the Scandinavian Tobacco Group [STG] in 2016) increased by 15 percent for the fourth quarter and by five percent for the full year. Reported operating profit from product areas increased by nine percent to SEK1,044 million for the fourth quarter and by six percent to SEK4,218 million for the full year.
Operating profit amounted to SEK1,179 million for the fourth quarter and to SEK4,591 million for the full year.
Profit after tax amounted to SEK904 million for the fourth quarter and to SEK3,400 million for the full year.
Earnings per share amounted to SEK5.10 for the fourth quarter and to SEK18.88 for the full year. Earnings per share excluding larger one-time items, dividends from STG in 2017 and share of net profit in STG in 2016 increased by 17 percent to SEK4.24 for the fourth quarter and by 14 percent to SEK16.39 for the full year.
“I am very pleased with Swedish Match’s performance in 2017 – a year of solid growth, with higher sales and operating profit from product areas,” said CEO Lars Dahlgren.
“Investments that we have made within our consumer insights and R&D functions have strengthened our portfolio of smokeless offerings, and we have supplemented organic efforts through acquisitions.
“In recent years, global tobacco competitors have signaled a shift in their strategic agendas to acknowledge the role of less harmful alternatives. With our vision of a world without cigarettes and long history of offering tobacco consumers significantly less harmful products, Swedish Match has pioneered this effort.”Snus reducing harm
Life expectancy has increased for all groups in Sweden except women with low educational attainment, and a sociology researcher believes that could be due to these women smoking at a time when Swedish men have mostly transitioned to snus, according to a EurekAlert! story relayed by the TMA.
Deaths from smoking are said to be three times more common among women with a compulsory education only than among those with a university education.
Deaths from smoking in Sweden had decreased among men and increased among women, particularly those with compulsory schooling only, said Olof Östergren, sociology researcher at Stockholm University.
“One possible explanation as to why men are less harmed by tobacco is snus,” said Östergren.
“Snus isn’t as dangerous as smoking, and it’s much more common among men than [among] women.”
At the same time, a stressful life situation can make the body more susceptible to the damaging effects of tobacco and alcohol, which means that differences in mortality depend both on behavioural differences and social and economic differences.
New CFO for Swedish Match
Swedish Match said yesterday that Tom Hayes was to become its new CFO.
This follows the resignation, for family reasons, of Marlene Forsell, who is due to leave her position on March 9.
CEO Lars Dahlgren said Forsell had joined Swedish Match in 2004 and had become CFO in 2013.
“Throughout her successful career at Swedish Match she has made many important contributions to our company,” he said. “We are very sorry that Marlene has decided to resign.”
But Dahlgren said the company was fortunate to have a strong replacement in Hayes who had been with Swedish Match since 2006.
“He already has experience in the CFO role at Swedish Match as he was acting CFO for nine months during Marlene’s parental leave in 2013 and 2014,” he said.
Hayes is currently vice president business control and CFO at Swedish Match’s US Division.
SM’s sales up and down
Swedish Matches snus shipments in Scandinavia during the three months to the end of September, at 61.7 million cans, were increased by about two percent on those of the three months to the end of September 2016, 60.6 million cans.
During the same periods, shipments of moist snuff in the US were down by about six percent to 33.6 million cans, while shipments of snus and nicotine pouches outside Scandinavia were increased by 74 percent to 3.5 million cans.
Swedish Match’s share of the Swedish snus market was down by 2.2 percentage points to 64.9 percent, while its share of Norway’s snus market was down by 1.2 percentage points to 52.0 percent.
The company’s cigar shipments during the three months to the end of September, at 405 million pieces, were increased by about one percent on those of the three months to the end of September 2016, 402 million pieces.
During the same periods, the company’s chewing tobacco shipments, excluding contract-manufacturing volumes, fell by about six percent to about 1,636,000 pounds.
Sales increased by one percent in local currencies, but reported sales declined by one percent to SEK4,069 million for the third quarter.
“This has been an exciting quarter for Swedish Match, where we have further demonstrated our commitment toward our vision of a world without cigarettes as evidenced by our efforts in modern smokeless products,” said CEO Lars Dahlgren in reporting Swedish Match’s third quarter and nine-months results.
“We have been introducing innovative new products, and continued to expand in new markets, organically as well as via the acquisition of the Danish smokeless tobacco business, V2 Tobacco.
“In the world around us, there exists a continuously growing interest, from consumers, industry players and certain important policymakers, in tobacco harm reduction. Where regulators have yet to acknowledge a more science-based approach to tobacco regulation, we have continued to make our voice and solid fact base heard.
“At the same time, we have continued our strong commitment toward our more traditional businesses, often in very competitive environments.
“For the quarter, sales and profit from product areas demonstrated resilience. Currency translation effects turned negative this quarter but sales grew in local currencies for both snus and moist snuff and other tobacco products…”
Apple CEO visits Iggesund
Apple CEO Tim Cook was in Iggesund, Sweden, yesterday to visit both the forest and the paperboard mill with the stated intention of learning more about the sustainability work of Iggesund Paperboard and its parent company, the Holmen Group.
Since 2005, Apple has been a major customer of Iggesund Paperboard, buying its Invercote paperboard, which is made at the Iggesund Mill.
“We are proud and pleased to have Apple as a customer, not least because they place very high demands on their suppliers’ sustainability work,” said Arvid Sundblad, vice president sales and marketing at Iggesund Paperboard.
‘Iggesund Paperboard strives to inspire next-century packaging with sustainable paperboard products, services and advice that enhance the value of world-class brands,’ the company said in a statement issued today.
‘The market-leading Invercote® and Incada® brands are used by some of the world’s most demanding brand owners.
‘Outstanding characteristics include superior durability, excellent color reproduction, whiteness that does not fade, taint and odor neutrality and design versatility.
‘Established in 1685 and part of the Holmen forest industry group, the company relies on its own sustainably-managed forests to ensure a renewable material for centuries to come.’
