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DOC, 111 kB - SWEDISH MATCH

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DOC, 111 kB - SWEDISH MATCH

Interim Report

Januari September 1998

; Consolidated sales rose to SEK 6,037 M (5,580).

    ; Operating profit amounted to SEK 1,045 M (1,201).

    ; Net profit amounted to SEK 578 M (812).

    Compared with the year earlier period, Swedish Match sales during the first nine months of 1998 rose 8% to SEK 6,037M(5,580). SEK 390 M of the sales increase a attributable to acquitions, mainly within the Match Division.

    Sales of Cigarette Division rose 10% during the third quarter compared with the second quarter of 1998. The increase was due largely to increased cigarette sales in Sweden after the tax reduction on August 1, 1998.

    The Snuff Division reported continued strong growth in Sweden and the U.S. Operating profit declined due to lower volumes in the Swedish market.

    Operating income declined to SEK 1,045 M (1,201), including an item affecting comparability amounting to SEK 48 M. The Group?s operating income in the third quarter improved significantly compared with the two first quarters of the year.

Summary of Consolidated Income Statement

SEK M First nine months

     1998 1997

Sales 6,037 5,580

    Operating income 1,045 1,201

    Income after financial items 894 1,195

    Net income 578 812

    1

Sales by Division

    First nine months Percent 12 months ended Full year

    SEK M 1998 1997 change Sept 1998 1997

Chewing Tobacco 812 868 -6 1,093 1,149

    Cigarettes * 1,091 1,193 -9 1,444 1,546

    Cigars 642 498 29 835 691

    Lighters 557 647 -14 744 834

    Matches 1,140 949 20 1,490 1,299

    Pipe Tobacco 160 122 31 204 166

    Snuff 971 786 24 1,264 1,079

    Koncerngemensamt och 664 517 28 848 701

    elimineringar *

    Summa 6,037 5,580 8 7,922 7,465

     * After May 1, 1997, external invoicing of Prince cigarettes is reported under Group-wide operations. Subcontracted production remains within the Cigarette Division. The change means that of total sales of Prince during the JanuarySeptember 1998 period, which amounted to SEK 324 M, SEK 119 M was reported in the Cigarette Division and SEK 205 M in Group-wide operations.

    Operating Income by Division

     First nine months Percent 12 months Full year

    SEK M 1998 1997 change Sept 30, 1998 1997

Chewing Tobacco 253 320 -21 353 420

    Cigarettes * 326 413 -21 450 537

    Cigars 94 96 -2 129 131

    Lighters 14 39 -64 28 53

    Matches 94 109 -14 132 147

    Pipe Tobacco 28 23 22 33 28

    Snuff 483 370 31 635 522

    Koncerngemensamt och -199 -169 -282 -252

    elimineringar *

    -48 - -48 - Jämförelsestörande post

    Summa 1,045 1,201 -13 1,430 1,586

    * Most of the contribution from sales of Prince cigarettes is reported under the Cigarette Divison. Chewing Tobacco

    The Chewing Tobacco Division operates solely in the North American market, primarily in the U.S.

    Sales amounted to SEK 812 M (868), a decline of 6% compared with the year-earlier period. Expressed in local currency, sales were down 11%. The decline in sales was due primarily to total market decline and somewhat lower market shares. The market was characterized by intensified price pressure. A new product in the low-price segment was launched during the period in response to competition.

    Operating income amounted to SEK 253 M (320), down 21%. Expressed in local currency, the decline was 24%. The decline was due mainly to lower volumes.

    2

Cigarettes

    The Swedish market accounts for 75% of sales invoiced by the Cigarette Division. The Division also sells cigarettes in Estonia and duty-free outlets, as well as filters and cigarette papers in the U.K.

    Sales during the period amounted to SEK 1,091 M, a decline of SEK 102 M, or 9%, compared with the year-earlier period.